Stock Market Timing

Due to large market downturns over the past twenty years we would like to take a look at market timing to try to smooth out our ride.

I have been investing in the stock market since 1987 and the majority of these investments have been in mutual funds. I've held individual stocks in a company owned 404-k plan and I dabbled in individual stocks for a short time a few years ago but mutual funds have accounted for the bulk of my investments.

In these twenty years in the stock market I've often wondered if you could increase your returns while at the same time decrease risk. After riding a few market downturns and most recently the downturn in January 2008 I decided that it was time to take another look to see how I could better insulate my gains while still matching or beating the market over the long term.

In these pages and over the days to come I would like to test some market timing ideas/theories and let you know how they work. Eventually the last paragraph on this page will tell you whether or not I think market timing is a viable alternative to buy and hold investing for increased returns and reduced market volatility by an average guy like me.

This search has led me to seven books to date including All About Market Timing by Leslie N. Masonson, The New Day Trader Advantage by Jon D. Markman, Short-Term Trading In The New Stock Market by Toni Turner, How I Made $2,000,000 In The Stock Market by Nicolas Darvas, Way of the Turtle by Curtis M. Faith, Forty Years A Speculator by Fred Carach and The Brainwashing of the American Investor by Steven R. Selegut.

Currently I'm using the system from The Brainwashing of the American Investor. This system does not claim to be a market timing system, but it does use price among other parameters to choose stocks.

I have also learned a lot from Forty Years A Speculator. This book is definitely not a market timing book, but is very interesting and there was a lot of useful information.

I'm currently still learning and can't, by any stretch of the imagination consider myself an expert at market timing or investing. I am trying to educate myself and see if a regular guy can learn enough to make money in the market at a reduced risk and I'm taking you along for the ride.

Please do not follow the purchase and sell moves that I make. These pages are to let you watch what I have done and for us to experiment with market timing to see if it is viable for us.

So far I have learned that it is not easy. I guess it's like everything else, if it were easy it wouldn't be worth doing. It also looks like insulation form the ups and downs of the market cannot be completely avoided, even with market timing.

Visit our Market Timing Performance Charts to see how we're doing.