| Wouldn't it be nice if you were only in the stock | | | | pay anyone else for the service. |
| market when it was going up and have everything | | | | Most of these timing methods use two a simple |
| transferred to cash while it is going down? It is called | | | | moving averages of from 50 days to 200 days |
| 'market timing' and your broker or financial planner will | | | | plotted with the S&P500 Index or the NYSE |
| tell you "it can't be done". What that person just told | | | | Composite or the Nasdaq Composite if you are |
| you is he doesn't know how to do it. He doesn't | | | | investing in the high tech stocks or mutual funds. |
| know his job. | | | | Yes, this definitely works with mutual funds. The |
| Even the Federal Reserve wrote an article saying | | | | longer the time of the moving average the less |
| that market timing does out perform the | | | | frequent will be the Buy and Sell signals. The signal is |
| S&P500 index which is one of the best market | | | | generated when the index penetrates the moving |
| directional indicators. | | | | average line. When the index is below the moving |
| There are many advisory services that offer market | | | | average and goes through it to the upside you have |
| timing. If you search on the Internet under "Market | | | | a Buy and visa versa for the Sell. Nothing complicated. |
| Timing" you will find them or you may look in various | | | | If you want to piggyback the work of Investor's |
| publications such as Technical Analysis of Stocks and | | | | Business Daily look at their Mutual Fund Index where |
| Commodities magazine or Investor's Business Daily | | | | they show both a 50-day and 200-day moving |
| newspaper. Once you have found several you will | | | | average lines. Both of these methods gave sell signals |
| find that some have several buy and sell signals each | | | | last September/ October. Would your investments |
| year and a few average only one timing signal per | | | | have been more profitable if you had gone to cash |
| year. Here it depends upon your personality and your | | | | at that time? Probably. The 200-day line still has you |
| approach to the market. | | | | in cash while the 50-day line had a Buy/Sell in January |
| For the active trader the more signals the better and | | | | and a new Buy about April 20. |
| for the longer-term investor the slow signals are best. | | | | Basically what market timing does is protect you |
| You will have to do your homework and will want to | | | | from any big loss in a bear market. The first rule for |
| send for a trial subscription to their newsletters. You | | | | all smart investors is to protect their capital. If your |
| might have to try several until you find one you like. | | | | broker does not know how to do this you need a |
| Instead of subscribing to an advisory letter you may | | | | new broker. |
| decide to make up your own timing signal. It will take | | | | It's your money. |
| some initial work, but once done you will not have to | | | | |