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
maide service in Lincolnshire ..Every stock market investor faces one primal enemy. An enemy... Read More
If you have a pension plan at work you will... Read More
The gleam and bright lights of Wall Street lure in... Read More
Just about now everyone is confused as to which way... Read More
Wall Street's watchword has always been diversification, but what does... Read More
You have a lock on your house. You have a... Read More
Where is the beef? Or maybe it should be where... Read More
It is difficult to make money in a bull market,... Read More
We all know that emotions control every decision that an... Read More
Congress recently passed another new law that is supposed to... Read More
There is a current movie entitled "Eternal Sunshine of the... Read More
We have two candidates for president that have really different... Read More
As an investor you will want to check out any... Read More
Suppose your position has made a big move and you... Read More
One Saturday morning, while he was sitting at his computer... Read More
First let's see what protectionism is. According to Mr. Webster... Read More
Humpty Dumpty had a great fall and all the King's... Read More
Its dinnertime and the phone rings. It's Joe Noname with... Read More
There are so many kinds of work that needs to... Read More
Money: the most charged word in the planet. It means... Read More
I am taking the time to help others learn the... Read More
When you become interested in a stock or mutual fund... Read More
If you go to Haiti or other places in the... Read More
When it comes to stock market trading it PAYS to... Read More
It has fallen upon the consumer to make our economy... Read More
cleaning lady near Deerfield ..(1) Stock Market is Tough Place to Make Any Money... Read More
Ever done any whitewater rafting or canoeing? Long periods of... Read More
Reduce your investing and stock market risks by:Setting your sights... Read More
Ever have one of those sample boxes of candy? Each... Read More
Trading is a fascinating activity.There are so many layers to... Read More
According to Investopedia Inc. the penny stock market has seen... Read More
People are always asking me when should I sell my... Read More
I am hearing predictions by brokers, financial planners, talk show... Read More
IT'S REMINISCENT OF THE OLD children's tale about an old... Read More
Financial markets provide their participants with the most favorable conditions... Read More
This is the continuing story of our two imaginary traders,... Read More
When you stand on the ocean shore and watch the... Read More
Are you one of those many people who dread reading... Read More
Having lived aboard a sailboat for 2 years I was... Read More
There is nothing more exciting than finding an undervalued stock... Read More
When it comes to stock market trading it PAYS to... Read More
What are you thinking when it comes to your no... Read More
Ever notice how behavior in one area of life can... Read More
When it comes to mutual funds, there is a lot... Read More
How many times have you said to yourself, "I'd like... Read More
Success in small cap & micro cap stock trading like... Read More
If you have not back tested your trading system, you... Read More
Mutual funds were moderately successful in creating a presence in... Read More
Professional stock options traders use the term lean to refer... Read More
Two weeks ago I wrote about what the Securities and... Read More
Stocks & Mutual Fund |