| Stock market timing protects portfolios from a bear | | | | a break-even point? |
| market pummeling losing 50% of a lifetimes | | | | Market Timers Understand Opportunity Cost Analysis |
| hard-earned and saved investments comes as a rude | | | | If the market drops 50% in 1 year, it will take a |
| wake-up call to most investors. The shock of opening | | | | 100% return just to break-even when practicing a |
| a 401K or IRA statement and discovering half of | | | | "buy and hold" strategy. In this example if the |
| your retirement portfolio has vanished is too much to | | | | rebound only took a year to recover, that means |
| bear for some people. With so many investors feeling | | | | your capital was tied up for 2 years and generated |
| the pain of the recent bear market collapse in stock | | | | zero return, and also experienced significant volatility |
| prices, people are now willing to discuss and review | | | | in the process. What if you avoided the 50% market |
| portfolio protection strategies that can help minimize | | | | drop, yet only caught half of the upward recovery? |
| future significant declines in portfolio investments. | | | | Your portfolio value would be 50% larger that the |
| The Secret Underbelly of Stock Timing Strategies | | | | "buy and hold" investor, and would not have |
| Lost in the debate between the market timers and | | | | experienced any significant downward volatility. |
| the "buy and hold" crowd is that fact that market | | | | Stock Market Timing Secret Weapons |
| timing signals and strategies are a very effective | | | | The second real secret of portfolio timing is knowing |
| portfolio defensive tool and can signal when to get | | | | what asset classes are outperforming the markets. |
| out of the market. The real secret to timing the | | | | There are several famous studies on asset allocation |
| market is not in picking the best or hottest new | | | | strategies that have concluded that asset allocation |
| investment, but when to actually sell investments and | | | | accounts for over 92% of in investments |
| shift into safer assets such as treasuries and cash. | | | | performance. This is an astonishing statistic when you |
| This is by far the greatest contribution market timers | | | | consider all the time and analysis people put into |
| have ever made to portfolio investing, but few | | | | stock selection and analysis. Several other studies |
| people stop to consider this fact. | | | | published on stock market timing [ have reported |
| Why Not Just Buy and Hold On Forever? | | | | that significant outperformance is possible with timing |
| Many proponents of "buy and hold" investing will | | | | strategies, and that their greatest value lies as a |
| argue that eventually the market will recover, so if | | | | defensive portfolio capital preservation strategy. |
| you hold on long enough the value of your portfolio | | | | How to practice market timing stock market timing is |
| will eventually recover. They also argue that the | | | | best practiced with a longer investment time horizon, |
| long-term directional bias of the market is up, and if | | | | and inside tax deferred accounts like 401Ks, IRAs, |
| you try to time it and sell, you may miss the market | | | | Thrift Savings Plans, and Roth IRAs. With a lot of |
| rebound. Market timers actually agree that the | | | | reading, research and good trading software almost |
| long-term trend has an upward bias, but there are | | | | anyone can develop a simple market timing model. If |
| simply better places to invest capital during a 12 or 18 | | | | you don't have the time there are many free |
| month downturn. Why not simply sit in cash while the | | | | resources and newsletter subscriptions that can offer |
| market is in a downward market trend? Why watch | | | | market timing data and advice to follow. At the end |
| your investments erode in value by 50% over a | | | | of the day its your portfolio, and if you won't |
| year, and continue to hold on for several more years | | | | protect it, who will? |
| hoping for that 100% return just to get you back to | | | | |