I don’t know if we are going to continue this bear phase of the market or if a bull phase will soon return. Anyone who tells you they know–run like hell.
But I do know that moving averages will keep you on the right side of the market.

What are the results for the same period for the QLD?

By the way, where is your protection if we go into a long term bear market–one that lasts for several years. We’ve been in a secular bull market for several years, where buy-and-hold can work. If you can live with risking your future on the bull market continuing–go for it. But you are essentially handing your future off to fate. My method at least gives you some control over your fate. If you don’t think we can’t go into a bear market for any length of time, run your tests back to the 1930′s and 1970′s.

Dick

Might his strategy work sometimes? Yes, it might. But I suggest you do some research because it’s pretty easy to see that it won’t always treat you so well.

Dick

Your advice against timing the market is probably good advice for those who don’t have a clue about financial matters. But it doesn’t take a genius to figure out that buy-and-hold can be a losing proposition. And if you say, “well, you should know your stocks and sell them if they don’t meet your original criteria”–then I consider that just another form of timing. However, usually by the time you figure out your stock doesn’t meet your criteria, it has probably lost a good portion of it’s value. Let’s face it, companies are going to do everything in their power to disguise their problems as long as they can.

I have had considerable success timing the market, both short, intermediate and long term. The typical advice that it can’t be done is just simply wrong and probably bad advice. It’s bad advice because it can be learned and telling people it can’t be done discourages the uninitiated from even trying.

Most people don’t want to get involved with managing their money, but they will ultimately pay a very high price for that–like working many more years than necessary. Yet if they were to just take a few minutes a week to look at a chart of, let’s say the S&P or NDX, they could avoid many of the pitfalls the market presents.

Here is a very simple way (by no means the only way) to “time” the market that will suit many individuals who don’t want to spend much time at it:

l) Invest only in an ETF or index representing a broad portion of the market. (Example, the QLD, which represents the NDX-100 technology sector times 2.)

2) Be invested in that ETF as long as the NDX-100 index remains above it’s 200 day moving average.

3) Sell the ETF and go into a Money Market fund or cash when the index falls below that 200 day moving average.

Check this moving average at least once a week and take action as necessary. This is the absolute minimum you can do in the form of timing. It will keep you in the market in most of the good times and out of the market during most of the bad times. (Using the index in the above example, QLD responds to the NDX-100 index times 2; e.g., if the market goes up 1%, QLD will go up 2%–and vice versa on the downside. A more conservative approach is to use the QQQQ ETF.)

Dick