Wouldn't it be nice if you were only in the stock market when it was going up and have everything transferred to cash while it is going down? It is called 'market timing' and your broker or financial planner will tell you "it can't be done". What that person just told you is he doesn't know how to do it. He doesn't know his job.
Even the Federal Reserve wrote an article saying that market timing does out perform the S&P500 index which is one of the best market directional indicators.
There are many advisory services that offer market timing. If you search on the Internet under "Market Timing" you will find them or you may look in various publications such as Technical Analysis of Stocks and Commodities magazine or Investor's Business Daily newspaper. Once you have found several you will find that some have several buy and sell signals each year and a few average only one timing signal per year. Here it depends upon your personality and your approach to the market.
For the active trader the more signals the better and for the longer-term investor the slow signals are best. You will have to do your homework and will want to send for a trial subscription to their newsletters. You might have to try several until you find one you like.
Instead of subscribing to an advisory letter you may decide to make up your own timing signal. It will take some initial work, but once done you will not have to pay anyone else for the service.
Most of these timing methods use two a simple moving averages of from 50 days to 200 days plotted with the S&P500 Index or the NYSE Composite or the Nasdaq Composite if you are investing in the high tech stocks or mutual funds. Yes, this definitely works with mutual funds. The longer the time of the moving average the less frequent will be the Buy and Sell signals. The signal is generated when the index penetrates the moving average line. When the index is below the moving average and goes through it to the upside you have a Buy and visa versa for the Sell. Nothing complicated.
If you want to piggyback the work of Investor's Business Daily look at their Mutual Fund Index where they show both a 50-day and 200-day moving average lines. Both of these methods gave sell signals last September/ October. Would your investments have been more profitable if you had gone to cash at that time? Probably. The 200-day line still has you in cash while the 50-day line had a Buy/Sell in January and a new Buy about April 20.
Basically what market timing does is protect you from any big loss in a bear market. The first rule for all smart investors is to protect their capital. If your broker does not know how to do this you need a new broker.
It's your money. Keep it.
Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.
Copyright 2005
http://www.mutualfundmagic.com; 1-888-345-7870
weekly home cleaning Highland Park ..In 1960 an engineer working for a watch company in... Read More
The basis of diminishing return discussions surround such simple notions;... Read More
Very few people, even professionals, have heard of the Dalbar... Read More
Stock investment advice is easy to find. Do you get... Read More
Sidney felt sick as she looked at her latest OptionsXpress... Read More
There can't be many traders who haven't at least considered... Read More
One of the most believed bits of conventional wisdom from... Read More
Recently I watched my favorite football team lose a vital... Read More
We learnt the following the hard way! If any of... Read More
Wall Street has been preaching the doctrine of Buy and... Read More
Most stock market traders have a favorite technical indicator.The one... Read More
If you don't know where you are going any road... Read More
Inverted interest rates? What's that? Who cares? Even if you... Read More
I often play a little game with myself when I... Read More
The spring-loaded rat catcher is the ultimate low-tech device invented... Read More
I love roller coasters. The steeper the better. High and... Read More
Sometimes the best way of lowering exposure to risk is... Read More
The debate rages all over Eastern and Central Europe, in... Read More
Buy high and sell low -- It's not a typo.Millions... Read More
You have a lock on your house. You have a... Read More
If there is one term over-used when talking about making... Read More
Analyzing growth stocks is an important focus for any investor.... Read More
What can I expect to make my first year of... Read More
Dollar cost averaging is one of the most popular ideas... Read More
Every Wall Street analyst, financial planner and broker will tell... Read More
whole house cleaning Park Ridge ..Money management starts with protecting your capital, realizing profits and... Read More
Buy high and sell low -- It's not a typo.Millions... Read More
People are constantly asking me why is the stock market... Read More
Sidney felt sick as she looked at her latest OptionsXpress... Read More
It depends on your level of understanding of the market... Read More
Three little pigs went to the market to stock up... Read More
Every successful trader has a winning system. There are of... Read More
Cat or dog? Maybe Zebra. Shucks, I don't know, but... Read More
Let's discuss commodities; with the latest Enron situation, it is... Read More
The spring-loaded rat catcher is the ultimate low-tech device invented... Read More
I use the P/E ratio as a secondary indicator for... Read More
After finding the price of a particular stock, usually the... Read More
That sounds like good advice doesn't it? Don't lose all... Read More
The trading method you employ to approach the stock market... Read More
Index Fund Trading can be one of the most profitable...or... Read More
It seems that every day I turn on the TV... Read More
For the year 2000 we have seen hundreds of mutual... Read More
The thinking process of the brain relating to the... Read More
∙ Make every investment in the stock market a long-term... Read More
Quick, look out the window. It's raining. No, the sun's... Read More
If you have been watching the stock market at all... Read More
I was devastated!I just couldn't believe it. I was 10... Read More
Being wrong is OK, but let's not carry it to... Read More
How many times has this happened to you? You're at... Read More
Trading is a fascinating activity.There are so many layers to... Read More
Stocks & Mutual Fund |