Market timing is not a science but after investing for 40 years I have come to realize that market timing has credibility and through studying various market timing systems and market timing indicators I have developed a strategy of using market timing to keep my portfolio on the right side of market direction. Whereas there is truth that no amount of market timing or market timing systems can be accurate 100 percent of the time or even 50% of the time, I have found that for my portfolio to benefit my market timing indicators do not have to be right more than 50% of the time.
What is important for my portfolio is for it not to get heavily invested when the overall market direction is about to turn down. In other words when the market direction is heading lower, it is time for caution and to raise cash levels. Therefore if my market timing indicators warn me that the market direction may change, I pull back and raise cash levels just to be on the safe side. This system of applying my market timing indicators and remaining cautious during market pullbacks has assisted my investing to the point that over the past 35 years I have never had a negative year. While it is true that in some years the market has shot up tremendously and I have not earned as much as the overall market, in the end it works to my favor to be cautious as on average I am up far beyond what the S&P 500 has been able to provide investors simply because I miss so many of the big crashes.
Market Timing And How I Use It
For me then, market timing is not about predicting how high or low the market may go. It is not about predicting exactly where a crash or collapse may occur. Instead it is about using market timing technical indicators to warn me when to stay cautious and when to raise larger amounts of cash. It is true that I am always investing in the stock market but through market timing I have been able to keep my trades on the “right side” of market direction and therefore I have benefited from both bull and bear markets.
Market Timing Articles
Here is a list of articles that can assist investors in setting up their own market timing systems or methods for profit and income.
There are three levels of market timing, longer-term, long-term, mid-term and short-term. Every night I put up my short-term outlook which I follow consistently in order to profit from the market direction. In this article I discuss how I use market timing indicators to keep me on the right side of the market and how I combine all the various market-timing levels in order to stay profitable and stay invested even during the worst market conditions.
Even for the skeptics this article is worth reading as it lays out what is meant by the term Market Timing and how every investor should consider using it in their day-to-day investing and trading. This is a great place to start for gaining an understanding of market timing in general.
This article looks at how I use market timing and why after so many years of investing I have come to believe in it.
I have found that investors either believe in market timing or they don’t. This article makes the case that it is not worth the effort to continue to debate the merits of market timing when it comes to investing. Instead consider a number of strategy that might assist an investor’s desire to grow his capital.
Regular readers know that selling options, in particular selling naked puts, is my favorite strategy for profit and income. In this article I discuss the important role that market timing plays when it comes to selling options.
In this article I look at the steps investors can take to decide which of the market timing technical indicators they should consider using for their stocks and their style of investing.
There are literally dozens of market timing systems in use today. Everything from candlesticks to planet alignments and the ocean’s tides. The Ultimate Oscillator is an excellent market timing system.
Another simple yet uncannily accurate market timing system is using the commodity laden Toronto Stock Exchange to predict market downturns.
MACD (Moving Average Convergence / Divergence) Histogram is another market timing system used by thousands of investors. In this article I look at how good a technical tool it is for timing when to get in and get out of the stock market.
Select this market timing link to read Wikipedia’s take on market timing.