Market Timing, Do You Have What It Takes?
Market timing works, and it works well for people
who actually practice it as a discipline. In theory,
every investor is capable of following the disciplines
of timing. But not everybody has the right emotional
makeup to do timing right. In real life, many people
who try are ultimately unsuccessful.
Importantly; at Fibtimer we do not try to "predict" the
future. We do not try to trade reversals.
We do not trade according to the alignment of the stars
or any hocus pocus strategies. Fibtimer strategies
trade trends! All of our work is based on identifying
and trading trends. Long term trends (months
to years) for our conservative strategies and shorter
term trends (weeks to months) for our aggressive
strategies.
Timing puts investors on the front lines, face to face with the realities of
the market, every business day. To be a successful timer, you have to buy and
sell without flinching even when you don’t feel like it. You have to
follow your discipline even when you think the signal may be in error.
You’ve got to do it even when you don’t understand why your timing
system is telling you to act.
Perseverance
Timing can get you in real trouble if you try it for awhile, become discouraged
and then abandon your plan in favor of something you find more palatable.
If you let your feelings guide you, you’re likely to bail out of a timing
strategy at the very worst time, when your investments are down.
Can you adopt a strategy and stick to it for the long term? Can you follow
the system regardless of how you feel about it and regardless of what’s
going on around you? Can you resist the temptations to act on impulse? Can
you ignore the many "hot tips" you may come upon every week?
| "Your goal
should not be to achieve perfection. It should
be to put the probabilities on your side. And a
good timing strategy will do that." |
Most of the time, you can count on your system to get you
into or out of the market "too soon" or "too late" to catch
the tops and bottoms.
If getting out at the very top and getting back in at the very bottom are your
goals, timing is guaranteed to let you down. And if that failure will drive you
nuts, think twice before embarking on a timing strategy, because what you will
perceive as timing mistakes will erode or destroy your willingness to follow
the discipline.
Your goal should not be to achieve perfection. It should be to put the probabilities
on your side. And a good timing strategy will do that.
Ignoring The Media
Almost unanimously, the press seems to have a blind spot when it comes to timing.
They say timers are misguided, and this view is widely echoed by the mutual fund
and brokerage industries.
Can you pull out of the market when everybody else is either getting in or
already making money? Can you get back in when your friends, colleagues, the
media and possibly your own gut are telling you it’s a dumb idea?
Making Decisions
Some people stew and fret and delay making decisions, even when they are convinced
they should do something. They are unlikely to be successful timers.
Successful timing requires quick action to move into and out of markets. One
of the most obvious truths about timing (and one of the most widely overlooked)
is that by the time your friends, your colleagues, your gut and the experts
all agree on what you should do, it’s already far too late for you to
extract the maximum opportunity from it.
Conclusion
Market timing works, and those who are able to stick to long term successful
market timing strategies reduce their risks in the markets, and enhance their
returns. Our trading history, tracked by independent auditors at Timertrac.com
and Hulbert Financial Digest, are proof that our strategies work over time.
We know this as a fact after more than 20 years timing the markets. Although
there are times when even the very best timing strategies are not profitable,
we must remember that timing is not about winning on every trade.
Timing is about winning over the long haul. About reducing risk and protecting
capital during dangerous market conditions. About winning over the years.
