Commentary: It's been a very bad year for the Seasonality Timing System

April 16, 2007

From MarketWatch:
This year has been a very bad one for the Seasonality Timing System, a market-timing system that calls for getting into and out of stocks according to nothing more than the calendar.

What's the big deal about that, you say?

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Timing is everything in comedy, not investing

April 15, 2007

From USA Today:
Q: I recently moved all my stock investments into money market funds because I can't afford to lose. Is it safe to put the money back into stocks?

A: Your question concerns me. If you're so nervous about your stocks that you're willing to jump in and out, your portfolio may be too aggressive.

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Market-beating market timers are more bullish than the laggards

March 18, 2007

From MarketWatch:
On Monday, the broad market hit a new intraday low for the correction that began last Fall.

The previous intraday low for the correction was set on January 23, when the intraday low for the Standard & Poor's 500 index was 1,270.05. On Monday, in contrast; this index's intraday low was 1,256.98, more than 1% lower.

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Timing the markets?

March 17, 2007

From Business Day:
Summit TV speaks to Warren Ingram from Galileo Capital about flexible funds and funds of flexible funds - but the crucial question remains is anyone smart enough to time the markets?

BRUCE WHITFIELD: People who create financial products are also often creative when it comes to names calling them “guaranteed products” or guaranteed something - one is not always certain exactly what that means - and then there’s “flexible funds” but are they really that flexible? There’s a myriad of other investment offerings which have grandiose names - but they don’t necessarily always match up to our expectations of them. Warren Ingram is from Galileo Capital and he is in the Summit TV studio. Warren, flexible funds is our focus this evening - I don’t mean to be unkind about what people call their products, they’re entitled to call them whatever they like - but “flexible” refers to a particular style of investing which is what exactly?

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SEC fines A.G. Edwards brokers in market-timing scheme

March 12, 2007

From STLtoday.com:
An administrative law judge with the Securities and Exchange Commission ordered three brokers with the former A.G. Edwards brokerage firm to pay fines and give up money netted in a market timing scheme based in Massachusetts and Florida.

In May, A.G. Edwards agreed to pay $3.86 million in fines to settle federal charges that it failed to supervise brokers in the scheme, which involved frequent trades in clients' mutual fund accounts. Trades occurred from September 2001 until September 2003.

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Big is better

March 11, 2007

From MarketWatch:
Large-cap stocks, which have significantly outperformed smaller-cap stocks over the past couple of years, are likely to continue their winning ways.

That at least is the forecast of a market-timing model maintained by Ford Equity Research of San Diego. This firm is on my radar screen because it publishes Ford Equity Research Investment Review. And its market-timing model deserves to be on your radar screens because it has a good long-term record.

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Timing Your Way to Retirement

March 6, 2007

From The Motley Fool:
A recession is coming! Get out of the market! Buy gold! Buy defensive stocks like Berkshire Hathaway (NYSE: BRK-A), Altria (NYSE: MO), and Kraft Foods (NYSE: KFT)! Hide under the bed! Quick!

Surely you've seen headlines like these, and you've probably wondered if you should be making changes to your retirement portfolio. After all, things are clearly going downhill, aren't they? Shouldn't you be thinking about getting out of stocks altogether, at least until things turn around?

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To Time or Not to Time?

March 6, 2007

From HoweStreet.com:
Mark Twain once said the return of his money is more important than the return on his money. Many investors get into this same mindset when they look at the market during volatile times like the current environment.

So why would I even begin to suggest that you try to time the market? It’s simple. That’s how you make money over time.

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Black Swans, Portfolio Theory and Market Timing

February 11, 2007

From SeekingAlpha:
This is an article that I have wanted to write for a long time, but a number of recent events have inspired me to finally commit it to paper. Phil DeMuth and Ben Stein recently published a book, Yes, You Can Supercharge Your Portfolio (Hay House 2008), in which they are attempting to bring the value and concepts of portfolio theory to a broad audience. The core of the book explains how a good statistical model of the portfolio can enable investors to build better portfolios and they use Quantext Portfolio Planner (which I developed) for their demonstration cases. The essence of ‘better portfolios’ is to get more return for less risk.

At the very start of February 2008, Phil decided to look at a few of the ‘model’ portfolios described in the book and how they had fared through the volatile previous quarter. This period (November 2007-January 2008) exhibited substantial market declines and Phil wanted to see whether what the models had suggested was indeed playing out. He published an article on this on Seeking Alpha.

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Investors struggle with timing return to stock market

February 10, 2007

From The Columbus Dispatch:
Lloyd Philip doesn't trust this market and isn't making any long-term bets because he sees Wall Street's list of worries as too long.

Philip, a 33-year-old investor in Philadelphia, plans to jump in for the long haul when the Standard and Poor's 500 index -- the benchmark used by most professionals -- has fallen 20 percent to 30 percent from its October highs. But while stocks remain volatile and have shown some very tentative signs of searching for a bottom recently, the question for those who fled the market becomes: When do I get back in?

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Does Market Timing Actually Work?

January 9, 2007

From Seeking Alpha:
Why not just buy low and sell high? That’s easy enough, right? The classical answer is a resounding no and there are reams of analyses to prove that it’s not a good idea to try to do this. Most arguments against timing make the case that the market is extremely volatile and impossible to predict. It’s extremely easy to miss the best performing days and if you do you will have substantially worse performance than if you had stayed in the market the entire time. I’ve seen many variations of the following analysis [1] over the years:

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Market-Timing Abuses Cost Morgan $17M

January 7, 2007

From Wolters Kluwer:
The SEC has agreed to terms with Morgan Stanley for failing to supervise four brokers who it claims created accounts in order to avoid market timing restrictions.

While the firm agreed to settle with the regulator for $17 million, the Commission went ahead and charged two of the reps, while settling with a third. The regulator did not identify the fourth individual yet.

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Timing is everything to investors - or is it?

December 26, 2007

From Emirates Business 24/7:
They say timing is everything, and it certainly is true for stand-up comedians. Whether it’s true for investors is a hotly disputed subject. The staid old mutual fund companies are very sniffy about market timing, which is the attempt by the likes of you and me to buy stocks or bonds when they’re all cheap and unload them before they all drop in price – in other words to guess when the cycle will turn just before it does.

The Vanguard Group, the vast Pennsylvania money managers who pioneered index stock funds for retail investors, repeat the mantra “stay the course” every chance they get. They must have people like me in mind.

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Stop Fretting -- Just Invest It

December 23, 2007

From The Wall Street Journal Online:
Year-end bonuses are just around the corner, but putting that money into stocks may not seem so smart right now. The market has been gyrating wildly, with cliff-hanging swings not seen in almost a decade. Maybe it's better to wait for a more attractive time to invest, you might think.

But that's probably not the way to go. If you're thinking of directing a bonus or other financial windfall to stocks and you won't need the money for several years at least, take a page from Nike and just do it.

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It takes guts, not timing

December 17, 2007

From TheTimes.co.za:
Many investors believe that they can time the market. It would be so nice, wouldn’t it, to sell before every market drop and then get back in just as the good times roll again.

But, as the fund managers will tell you, it is hard to pull off. Nobody knows exactly when markets will turn, not even the experts.

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Excess returns: All about market timing

December 16, 2007

From The Hindu Business Line:
Asset prices are galloping at a fast pace in the Indian market. Many investors have not participated in the recent uptrend for the fear of a sharp turn in prices. Market timing is, hence, a relevant topic in the current environment.

Professor Javier Estrada’s paper “Black Swans and Market Timing: How not to generate alpha” concludes that “market timing is an entertaining pastime but not a good way to make money.” He argues that if a portfolio manager misses the ten best days in the market, the portfolio annual returns reduce by 3 percentage points.

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'Buy and Hold': As True Now as Ever

November 29, 2007

From Seeking Alpha:
At times like this, old-fashioned advice such as ‘buy, hold, and don’t pay attention’ works extremely well. I’ve had several clients call over the past few weeks concerned about the day-to-day volatility in the stock and bond markets. I try to quickly remind everyone that asset allocation, diversification, and a solid financial plan are the ways to help achieve wealth--not cashing out a stock when it’s making money and trying to time getting back in after the price drops. That strategy, known as market timing, is a losing proposition over the long run and is better to avoid altogether. So what has the market in such a panic? I’ll give you a few different perspectives.

First, you have those technical guys who think market conditions such as tight credit and high oil prices have nothing to do with anything. They believe the market moves from a technical standpoint only and analyzing the state of the economy is a waste of time. Technical traders believe markets can be read--even predicted--based on chart patterns. Having a technical perspective probably makes sense to many when it seems like even when good news pervades the markets, stock prices find a way to decline by 4:00. Many people who analyze the market in this way expect to see a 10% ‘correction’ (dip) in stock prices at least once every five years. As of this week, we’ve seen the 10% correction and the markets bounced back strongly between Tuesday and Wednesday.

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Smart Advice for the HuffPost Investor

November 27, 2007

From The Huffington Post:
Is it time to sell everything, organize your survival gear and head for the hills?

The market timers are telling us that this might be a wise time to consider such drastic action. They predict a market crash, with disastrous consequences for all of us.

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Of Blind Squirrels and Flying Pigs: The Fallacy of Market Predictions

November 22, 2007

From Seeking Alpha:
A prediction about the direction of the stock market tells you nothing about where stocks are headed, but a whole lot about the person doing the predicting. —Warren Buffett

The dollar is collapsing and global investors are dumping dollars so it will continue to fall. That in turn will lead to higher inflation and then the Fed will have to raise interest rates. Oil is closing in on $100 a barrel. We have the worst housing market since the Great Depression. There is a financial crisis caused by the subprime mortgage debacle. Banks are tightening credit standards. And if you needed more reasons to believe the stock market was headed south you could always throw in global warming.

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Stock Market Seasonality – Historical Data, Trends & Market Timing

November 22, 2007

From The Market Oracle:
We are entering what has historically been the best season to be invested in the stock market. According to Ned Davis Research if an individual invested $1,000 in the S&P 500 index from November 1 st to April 30 th every year from 1950 to 2006 – the ‘winter season' – and held cash in their account for the remainder of each year the account would be worth an astonishing $38,700 before tax considerations.

If, over the same 56 year period, an investor had invested the $1,000 in the S&P 500 index from May 1 st to October 31 st – the ‘summer season' – and held cash in their account for the remainder of each year the account would be worth $916. During that 56 year period an investor in the stock market using this seasonality strategy would have lost money.

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As the Calendar Turns, So Do Many Stocks’ Fortunes

November 18, 2007

From The New York Times:
IT’S hardly earth-shattering news when a particular stock performs better in one month than another. But what if those standout months — of especially strong or weak performance — remain the same, year in and year out?

This pattern occurs for many stocks, according to a new study. Though its authors couldn’t explain why stocks would adhere to such monthly rhythms, they believe that the pattern is strong enough to influence the timing of investments. Before you buy or sell a particular stock, they suggest, you should first check how it performed in the same calendar month in previous years.

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3 Myths About the Turbulent Market

November 15, 2007

From MSNBC:
The past few months haven't been short of hair-raising moments in the stock market. From panic to jubilation, and then back to panic, it's hard to tell exactly what's been going on. A credit crunch, a housing crash, a weak dollar, lower interest rates -- it's a lot to take in.

Regardless of whatever problem happens to pop up, there are several investing myths that come up during turbulent market periods. Here's just a few of them to think about.

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There's another way to protect small investor

November 12, 2007

From InvestmentNews:
Re: "New SEC rule seen as likely to deter market timing" [Oct. 22], as a mutual fund investor for the past 40-plus years we truly believe any rule deterring market timing for the small investor is a gross disservice.

In our case, we call market timing "market insurance." For a mutual fund investor with a balance of less than $1 million, it is not fair to impose a 2% penalty if the stock market unexpectedly goes into free fall and the investor decides to stop their losses.

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Market Timing: Science, Art or Luck?

November 6, 2007

From Federal News Radio:
There are lots of definitions for "market timing." Bottom line is that market-timers believe that, based on research and following the news, they can predict or know when the markets or an individual stock has peaked or bottomed-out.

John Bogle, founder of the Vanguard group and the father of the index fund, said that in 50 years in the business "I do not know of anyone who has done it successfully and consistently. I do not even know anybody who knows anybody who has done it successfully and consistently."

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Market timing is a loser’s game for long-term investors

November 3, 2007

From Sify.com:
Sad to say, financial research has demonstrated that stock-mar­ket timing does not work. Timers can make big profits over short periods of time such as a few years but the law of averages works against these systems. Using the concepts of diversification and portfolio rebalancing is a better way to invest. You manage your risks wisely and you peg your investments to meet your financial goals.

Have you ever received junk mail from stock-market timer’s investment advisors who have developed com­puter programs that tell them when to switch between stocks and cash based on trend analysis?

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Why You Need Market Timing

November 2, 2007

From Elliott Wave International:
To buy and hold stocks is comfortable for most people – so long as the markets are going up. But when the markets start to gyrate, as the Dow has since August, both investors and traders feel much less comfortable and tend to question the buy-and-hold strategy. If you are on the fence about buying and holding vs. market timing, you will want to read this question-and-answer session Bob Prechter did with a journalist a few years ago. It will provide you with useful information to help you decide how to proceed.

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I Ain't 'Fraid of No Market Ghosts

October 25, 2007

From The Motley Fool:
October has historically been a spooky month for the markets. Almost as if haunted by the October crashes of 1929 and 1987, they seem to fall prey to gremlins and their scary gyrations in the weeks leading up to Halloween. Last Friday's dramatic 367-point drop was just the most recent in a long, stomach-churning line of autumnal market frights.

Of course, market drops can be scary no matter the season. But what's scarier still is how many people react to them.

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Market Timing the Right Way

October 23, 2007

From Kiplinger.com:
I didn't lose sleep when the market slumped this summer after hitting record highs. I had lightened up on U.S. stocks a few months before -- mind you, not in all of my family's investment accounts, but only in those with near-term goals. I did so because I had grown increasingly skeptical of the market's surge during the first half of 2007, and I know that stocks are risky in the short run (say, less than five years) -- just as they are a highly reliable wealth builder over longer periods of time.

So I took a close look at the asset allocations in our accounts. The accounts with the most-distant horizons -- retirement savings in 401(k)s and IRAs -- I left heavily invested in equities.

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Crash and quivers a lesson, not guide

October 19, 2007

From The Sydney Morning Herald:
Twenty years on, and the question on everyone's lips is whether the crash of 1987 could happen again. It is the wrong question. Of course it could - and it almost certainly will. But it is pointless to speculate when. A more useful question is what investors have learned from the 1987 crash, and from the market fluctuations since. If we can't predict the future, we should at least learn the lessons of history.

And that is probably the first lesson worth learning: that the past, while a rich source of information and experience, is a poor guide to the future.

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Bullish timers and bubbling BRICs

October 17, 2007

From MarketWatch:
Anxious investors may be unnerved by the steady erosion of the dollar and the seemingly endless ascent of the price of oil, but, as Mark Hulbert reported last week, the investment newsletters with the best long-term market timing records remain firmly committed to the current bull market.

This week, Hulbert provides greater context for the significance of the top timers' current bullishness by surveying the equity exposures of the top timing newsletters at the peak of the last bull market in March 2000. His finding? The top timing newsletters during that period had already pared their average equity exposure back substantially, while their lesser peers were content to maintain a far more bullish posture. In other words, this past prescience suggests that the bullishness of today's top timers bodes well for the continuation of the current bull run.

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Timing investments correctly

October 8, 2007

From InvestmentNews:
As a team of active asset managers, we don't want to own all of the stocks all of the time, to paraphrase P.T. Barnum.

Instead, our objective at Sadoff Investment Management LLC is to avoid industries that are going through bust cycles, such as the current decline of the home-building sector, and select industries and stocks as they enter boom cycles.

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Still bullish

October 5, 2007

From MarketWatch:
In early August, when I last surveyed the stock market forecasts of the 10 market timers with the best long-term records, they on balance were quite bullish. And, as we now know with the benefit of hindsight, they were right to be bullish. See Aug. 1 column.

What are these top timers saying now? Are they any less bullish now?

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Fees Draw Skepticism as Answer to Timing

October 3, 2007

From The Wall Street Journal Online:
Mutual-fund executives and board members aren't optimistic that short-term redemption fees, encouraged by a new federal rule, will put an end to "market timing," according to a new survey.

Some 84% of fund board members and executives said they believe imposing short-term redemption fees -- penalties on early redemptions -- is an effective way to deter some short-term trading. But 69% of board members and 55% of fund-company executives said they believe some investors will time the market regardless of the fees, the survey found.

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Do You Have "Prediction Addiction"?

October 1, 2007

From The Huffington Post:
You are not alone. And it probably is not your fault. It may be chemical.

"Prediction addiction" was coined by Jason Zweig, a staff writer at Money magazine and the author of a fascinating new book, Your Money and Your Brain: How the New Science of Neuroeconomics Can Help Make You Rich (Simon & Schuster August 1, 2007).

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Evergreen settles market-timing case

September 20, 2007

From Boston.com:
Wachovia Corp.'s Boston mutual fund division, Evergreen Investment Management Co., agreed to pay $32.5 million to settle allegations it allowed shareholders to market-time in violation of prospectuses, the Securities and Exchange Commission said yesterday.

The settlement included Evergreen, three local affiliates, and a former officer and continues a series of settlements the SEC has reached with mutual fund complexes over practices that rocked the industry earlier in this decade.

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Investment Newsletter Insights

September 19, 2007

From MarketWatch:
The market has now rallied considerably from its August lows, but the average market-timing newsletter advisor remains decidedly skeptical of the market's ability to move higher.

And from a contrarian standpoint, as Mark Hulbert explains, this bodes well for a continued bull run. Hulbert further notes that investors will likely only need to turn cautious once these newsletter advisors exhibit the same sort of stubborn bullishness last seen during the tech bubble's top in 2000.

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Timing The Market

September 14, 2007

From TransWorldNews:
The market can seem like a perpetual roller coaster, good earning reports, up we go; worry over what the Fed has to say, down we go; no interest rate hikes, up again; fears of inflation, down again; over and over. What is an investor to do?

Studies show that staying invested through market fluctuations offers the best chance of earning the potential returns the markets offer. Market timers often try to predict big wins in the investment markets, only to be disappointed by the reality of unexpected turns in performance. It's true that market timing sometimes can be beneficial for seasoned investing experts; however, for those who do not wish to subject their money to such a potentially risky strategy, time - not timing - could be the best alternative.

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Wipe the fear factor from your calculations

September 14, 2007

From The Sydney Morning Herald:
They say markets are driven by fear and greed. I'm inclined to think it's more about fear. While greed plays its part, the average investor is much more likely to make irrational decisions based on fear - either the fear of losing money or the fear of missing out.

Fear of losing money is the crippling emotion that sees inexperienced investors panic-selling when markets fall or sticking rigidly to conservative investments that won't deliver the performance they need. But as retail investors have become better educated - and, to give credit where it's due, financial planners have become more professional - this is less of a problem than it used to be. These days, when the sharemarket takes a big dive, it's more likely to be the so-called professional fund managers leading the charge than the average retail investor.

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The Best Market Timers Remain Bullish

September 5, 2007

From Barron's Online:
The stock market appears to be settling down a bit from the extraordinary volatility that characterized the market in the last half of July and much of August.

This relative calm provides a good opportunity to step back and review the stock-market forecasts of those stock-market timing newsletters that have the best long-term records.

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A matter of timing

September 3, 2007

From EDP24 Business:
How, many investors will have wondered over the past few weeks, do you execute precise market timing?”

It's a question frequently posed in introductions to books apparently designed to 'educate' investors, although the truth is that waiting for the correct time to pounce and snap up a bargain is a mug's game.

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Get Greedy When They're Fearful

August 27, 2007

From Forbes:
It's easy to think of the greatest investors of all time and imagine people who, either through some sort of gift of birth or years upon years of diligent study, had a complete understanding of the economy and the stock market. These Wall Street gurus surely must have had an uncanny ability to get into the market at just the right time and cash out just before things went south, the type of investors who would have foreseen the market's recent slide and gotten out just in time.

It would make for a great story, the notion of these prescient, unbeatable investors. The problem is it's simply not true. Sure, some people have been fortunate enough to make a lot of money with good (perhaps "lucky" is a better word to describe it) timing.

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Timing the market what it's cracked up to be

August 25, 2007

From The Sydney Morning Herald:
If you had invested $10,000 in the Australian sharemarket in 1980 it would have grown to more than $316,000 by the end of last month. In those 27 years there have been slumps of the kind that make the past few weeks look mild, including the crashes of 1987 and 2000.

But if you had tried to improve your returns by timing your entry to and exit from the market to take advantage of its ups and downs, you would only have to have been a little bit unlucky to have ruined your long-term returns.

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Are Market Trends Effectively Random?

August 21, 2007

From SeekingAlpha:
Sun Tzu is an honorific title bestowed upon Sūn Wǔ. Tzu, who lived from 544 to 496 BCE, authored The Art of War, an immensely influential ancient Chinese book on military strategy. The book, composed of thirteen chapters, each devoted to one aspect of military warfare, has long been considered one of the definitive works on military strategies. It has also had a huge influence on business tactics. Investors can also benefit from its wisdom. They can particular benefit from the insight provided by one its most often cited phrases: “Every battle is won before it is ever fought.”

On July 19, 2007, the S&P 500 Index closed at 1553. By August 15, it had fallen to 1407, a drop of almost 10 percent in less than a month. The drop was fueled by a flight-to-quality, or what might be called a flight-to-liquidity. Headlines from the financial media reported huge losses in hedge funds as investors fled all risky assets, the kind of assets hedge funds often buy.

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Market-Timing Fund Stumbles

August 17, 2007

From TheStreet.com:
The stock market crisis has many investors either wondering if they should sell and cut their losses or trying to pick the bottom so they can put their cash back to work.

But the recent experience of one mutual fund that jumps in and out of stocks at regular intervals offers a cautionary tale about the dangers of market timing.

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Banc One Fund Investors Get Compensation

August 13, 2007

From Forbes:
The Securities and Exchange Commission announced Monday the distribution of $55.6 million to more than 200,000 investors who were harmed by allegedly fraudulent market timing in certain Banc One mutual funds.

The so-called Fair Fund distribution, resulted from a settled enforcement action in which Banc One Investment Advisors Corporation agreed to pay $10 million in disgorgement and $40 million in civil penalties to settle charges of unlawful market timing from 1999 to 2003.

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Take action, don't seek perfection

August 13, 2007

From The New York Daily News:
I've been investing for 50 years. I run two top performing funds and give investment advice. Yet I am not Peter Perfect. I have no clue how to time the market. Neither does anyone else.

The Charles Schwab study on market timing (see adjacent story) makes sense assuming you are betting on the market as a whole. Larry Linger will almost always be a loser, because over the long term, stocks will outperform Treasury bills.

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Market Timing, Part II

July 31, 2007

From Forbes:
In Thursday's blog, I quoted John Buckingham, who runs Al Frank Asset Management. John manages a good chunk of the Karlgaard household money, and he wrote to say market timing was a bad idea.

Of course, John takes a five- to six-year view of stocks. His idea is to scour the market for value. He buys stocks with low valuations and lots of cash on the balance sheets. John does not evaluate management. He does not worry about whether Democrats or Republicans are running the country. He buys dollar bills for 50 cents and patiently waits. His style is early Warren Buffett.

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In All Things Moderation, Including Market Timing

July 29, 2007

From The New York Times:
WHEN it comes to making asset allocation decisions in your portfolio, it is best not to be dogmatic. That is the conclusion of a new study, which found that investors are likely to do better over the long term by resisting the advice of those who take extreme positions about how much of their portfolios should be allocated among the various asset classes.

The new study, “Predictable Returns and Asset Allocation: Should a Skeptical Investor Time the Market?,” recently began circulating in academic circles as a National Bureau of Economic Research working paper. A version is available at http://www.nber.org/papers/w13165. Its authors are Jessica A. Wachter, an assistant professor of finance at the Wharton School of the University of Pennsylvania, and Missaka Warusawitharana, an economist at the Federal Reserve Bank in Washington.

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Citi Fined in Market-Timing Case

July 24, 2007

From The Wall Street Journal Online:
Citigroup Inc.'s Smith Barney unit on Tuesday was fined $50 million by the New York Stock Exchange's regulatory arm for using deceptive market-timing practices on behalf of hedge funds.

An NYSE hearing panel found that the deceptive market-timing was widespread. More than 150 financial consultants in 60 branches engaged in about 250,000 marketing-timing exchanges on behalf of more than 1,100 customers between January 2000 and September 2003.

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A New Twist On An Old Market-Timing Indicator?

July 18, 2007

From Elliott Wave International:
If you're a frequent guest at elliottwave.com – or especially if you're a subscriber of ours – you've probably heard us mention the "magazine cover indicator," developed by the analyst Paul Montgomery some decades ago.The theory underlying this indicator is that by the time a financial market makes it to the cover of a magazine, the trend is near exhaustion. Here are just some of the (many) examples:

This January, Time magazine ran a story about China titled "Dawn if The New Dynasty" on its cover. A month later, on February 27, a severe sell-offs in Chinese stocks sent shockwaves around the world.

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YOUR TWO CENTS -- Timing is nothing

July 16, 2007

From SanLuisObispo.com:
It's hot on Wall Street - maybe too hot. With stocks sizzling into record territory, some market watchers are worried the next big move could be a nose-dive.

Nervous about your nest egg? Maybe you're thinking you should park it someplace safe for a while, in bonds or the money market. Then you can move back to stocks when things calm down.

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For Better Market Timing, Rely on Systems, Not Emotions

July 13, 2007

From TradingMarkets.com:
The S&P 500 hit an all-time high Thursday, and year-to-date the index is up 10.2%. The bull market just keeps on rolling despite negative sentiment about subprime lending, the housing slowdown, the plunging dollar, high oil prices, and weak retail sales data on Friday.

While buy and hold investors are clearly making money, discretionary traders may not be faring quite so well. Just last week, a report showed that the number of bearish forecasts among newsletter writers was at the highest levels seen in a number of years.

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So is Our Market Timing Off, or Not?

June 18, 2007

From SeekingAlpha:
The problem with making market calls is that you are bound to be wrong. It seems our view at the moment is a bit off of the market beat.

Frankly, we missed out on this current market run and are shocked at the where we are now. Even more to the point, the economic drivers seem to have deteriorated over the last month. The 10 year note is still hovering around 5.26% and oil is closing back up toward $70 a barrel, having settled at $68 this past Friday.

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4 Simple Steps to Better Market Timing

June 14, 2006

From TradingMarkets.com:
TradingMarkets members and regular readers know that our philosophy is to look for short-term oversold conditions within the context of a longer-term up trend. In other words, we like to buy short-term market weakness. This philosophy comes from our quantitative research into how markets really work.

In January, we launched the TradingMarkets S&P Market Timing course, which we also trade in a real-money account. Since inception, the account is up 16%, hitting new equity highs on Wednesday. While past performance is no guarantee of future performance, we feel this course provides traders with a quantified edge they can count on.

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Does market timing ever work?

June 4, 2006

From MSN Finance:
Most mutual fund companies discourage rapid, short-term trading because it drives up costs for other investors. But they haven't banned it altogether. They should though.

In fact, they'd be doing everybody a favour since study after study provides further evidence that investors are their own worst enemies. We know this by studying the difference between time-weighted and dollar-weighted returns.

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Don't try to time the market

June 4, 2006

From Canada.com:
Bob, my fictitious middle-aged investor, phoned me last week, excited about the stock market's recent rise.

Bob said all the assets his family owns are rising in value. In other words, both his and Eve's equity portfolio and real estate holdings are increasing at the same time.

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Anatomy of a Precise Market-Timing Call

May 18, 2006

From Schaeffer's Research:
About two months ago, on the ides of March, Bernie published an article titled Short-Term Bottom in Place?: Volatility Spikes, Revealing a New Shade of Fear Amid the S&P 500 Index (SPX) Pullback. Bernie was encouraged by a intraday snap higher in the Dow Jones Industrial Average (DJIA) and the S&P 500 Index (SPX) during the previous day's session, a spike in the CBOE Market Volatility Index ( VIX: View sentiment for VIXsentiment, chart, options), and building volume on the S&P Depositary Receipts (SPY: View sentiment for SPYsentiment, chart, options).

His call could hardly have been more perfect. Below is a daily chart of the SPX, highlighting the March 15 publication date. Since then, the broad-market index has rallied 130 points, or nearly 10%, and achieved numerous new multi-year highs (including another one today, with the index hitting its highest level since September 2000).

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Applying Market Timing Theory To Practice

May 17, 2006

From TradingMarkets.com:
In my almost twenty years of trading on Wall Street, I have seen a lot of trading strategies and methodologies. One of my favorite strategies I have used successfully for trading intra-day involves buying or selling the 15 minute high or low of the stock or market I am following. In this article, I am going to show how I use this strategy in conjunction with TradingMarkets Market Timing buy or sell signals to come up with high probability trade set-ups. Let’s first discuss the strategy and then look at what behavior is behind it. The strategy rules are as follows: When we get a Market Timing buy signal, we look to play the stock or market from the long side the following day. We let the stock or market trade for a full fifteen minutes. We then mark off the high of the first fifteen minute period and place a buy stop order right above this high. If at anytime after this first fifteen minute period, the stock or market moves above the high we marked, we buy the stock or market automatically with our buy stop. The rules are reversed for sell set-ups. This simple strategy becomes very potent when combined with TradingMarkets buy or sell signals. So what are the fundamental reasons behind this?

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Timing the Real Estate Market With iShares New 'Sector' REITs

May 9, 2006

From Yahoo! Finance:
Barclays Global Investors [BGI] launched five new iShares REIT exchange-traded funds onto the NYSE Arca Exchange on May 4. The funds offer U.S. investors the ability to slice and dice the U.S. REIT marketplace into different 'sectors.'

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The allure of market timing

May 3, 2006

From MSN Finance:
I was having dinner with friends the other evening, and the topic of investing came up. We talked about this, and we talked about that. And then we talked about market timing. Isn't there a way to avoid the frequent downturns in the market, thus preserving both capital and nerves, and speeding the business of building wealth?

It's a compelling question. For all the touted reliability of the handsome long-term average returns delivered by stock markets, the short-term ride feels a lot like the wooden roller coaster at the PNE in Vancouver. On average, one out of every three months has been negative for the major North American stock markets. Whoo-hoo! Last year was a classic example. There were exactly four negative months and eight positive months for the S&P/TSX stock market index in 2006. Sure, it was a good year for the stock market, even with those negative months. But can you imagine how great returns would be if you could avoid at least some of the downturns? That's the tantalizing promise of market timing. After all, while folks may line up to experience thrilling ups and downs on a ride at the fair, they'll pretty much do anything to avoid it in their investment portfolios.

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Market-Timing Gets More Expensive for Some

April 27, 2006

From The Wall Street Journal:
Due to a recent deadline related to a mutual-fund market-timing rule, some fund shareholders may see redemption fees where there were none before, while others may see the fees removed from their funds.

Market-timing, the rapid in-and-out buying of fund shares, isn't illegal, but it can be costly to long-term shareholders. The rule required ...

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Still bullish

April 27, 2006

From MarketWatch:
The market-timing newsletters with the best long-term records remain as bullish today as they were following the sharp market break on Feb. 27.

As some of you may recall, I turned to these top timers that day for guidance. The Dow Jones Industrial Average had just dropped 416 points, prompting many to worry that the market had topped out and a severe bear market had begun. As I discovered when writing that column, however, each of the five newsletters with the best long-term market timing records was bullish. See Feb. 27 column

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The follies of marketing timing

April 9, 2006

From RockyMountTelegram.com:
Many investors try to "time" the market by "buying low and selling high." In theory, that's a great idea, but it's almost impossible to put into practice.

If you try to outguess the market, you run the substantial risk of guessing wrong – of buying stocks too soon, before they get even cheaper, or of selling stocks too late, after they've fallen from their highs. But these are only the most obvious of the problems that can result from market timing. Here are some others to consider:

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Seasonality timing back on track, and that's good news

April 6, 2006

From MarketWatch:
I received more than a few e-mails a month ago about the timing of the mini-crash in the stock market on Feb. 27.

That was the day, of course, in which the Dow Jones Industrial Average dropped 416 points.

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Fed Closes Market-Timing Enforcement Against BofA

February 28, 2006

From BankNet360:
It appears as though Bank of America Corp. [ticker: BAC] has cleaned up its act. At least in relation to its mutual fund operation.

Without going into details, the Federal Reserve Board yesterday closed the book on a two-year-old enforcement action against the Charlotte, N.C.-based banking giant, after the institution was accused of engaging in marketing timing.

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Index funds help you avoid risks of stock selection, market timing

February 27, 2006

From Boston.com:
Q Like you, I believe investing in index funds is a better way for individuals to invest. I was just about to start investing in index funds in my retirement accounts when I came across an old article by Gregg Wolper (Morningstar, 2/21/06) titled "The Hidden Drawback of Indexing." Wolper said that, "Believe it or not, index funds are, in effect, momentum players."

Although he did not discourage readers from investing in index funds, his concerns seem valid. I would like to know your opinion on the concerns raised in the article. I would also like to know whether it is the right time to jump into index funds at the peak of the market when most index funds are loaded with overvalued stocks. -- J.L., by e-mail

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NASD charges Wachovia brokers over market timing

February 15, 2006

From Reuters:
The NASD charged two Wachovia Securities brokers and their supervisor with helping a hedge fund manager conduct improper market timing transactions through variable annuities.

The brokerage regulator on Thursday said the Utah brokers David Corn and Jeffrey Doerr opened 20 brokerage accounts from 2000 to 2003 that helped James River Capital Corp. and its principal, Paul Saunders, engage in market timing.

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What the Front-Running Investigation Means for Fund Investors

February 12, 2006

From Morningstar:
Before the investigation into market-timing became public, fund companies were under siege from market-timers looking for a back door that would let them do market-timing, time-zone arbitrage, and even late trading. However, once Eliot Spitzer held his press conference back in September 2003, timing dried up quickly.

Suddenly, timing wasn't just something that hurt fund investors. It was a threat to fund company executives' careers and even freedom, and it was also a threat for the hedge funds and others who had been offering bribes to get away with timing and late trading. The net result was a big benefit for fundholders, as they are now pretty well-protected from timing, which reduces fund returns for long-term shareholders.

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SEC switches focus over market timing

January 22, 2006

From FinancialNews-US.com:
The US Securities and Exchange Commission has joined New York former attorney general Eliot Spitzer in turning the spotlight of its investigations into the market timing scandal onto hedge fund managers, issuing a lawsuit against a US firm.

The suit, filed last week, claimed hedge fund Clarion Management engaged in a fraudulent scheme to engage in market timing in mutual funds.

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Market timing conviction

January 17, 2006

From FinancialNews-US.com:
A former Millennium Partners mutual fund trader who pleaded guilty to improper trading in 2003 avoided a prison term after cooperating with a New York State investigation of the mutual fund industry.

The former trader, Steven Markovitz, was sentenced to five years’ probation on Tuesday by Justice James Yates of New York State Supreme Court in Manhattan. He was also ordered to perform 300 hours of community service.

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Trying to time market? Good luck

January 13, 2006

From The Houston Chronicle:
Bryan Olson, vice president of portfolio consulting at the Schwab Center for Investment Research, says the biggest mistake you can make is trying to time the market.

Tell that to the day traders.

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Improve Your Market-Timing with PowerRatings

December 27, 2006

From TradingMarkets.com:
We've all watched CNBC and seen how emotional the reporters and the analysts become after the market rises sharply for a few days or drops hard for a few days.

After the market has risen, everyone is jumping up and down telling you how good things are and why prices are likely going higher. After a hard drop, the doom-sayers come in repeating over and over again why the market dropped and why it will likely continue to drop.

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Deutsche Bank settles market-timing inquiry

December 22, 2006

From International Herald Tribune:
Deutsche Bank has agreed to pay $208 million to end a wide-ranging inquiry into the trading of mutual fund accounts that could have benefited insiders and hurt other investors, the office of the New York State attorney general, Eliot Spitzer, said Thursday.

The settlement comprises $102 million to be paid to investors, $86 million in fee reductions over five years and a $20 million civil penalty, Spitzer's office said. The agreement was reached in cooperation with the U.S. Securities and Exchange Commission.

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Getting Your Timing Right

December 17, 2006

From Barron's Online:
MY E-MAIL IN BOX IS THE DESTINATION for several notes a day touting various traders' stock market timing tips and asking me to pay to receive these insights. I read the claims of magnificent gains and wonder, "Can this really be true?" before moving on quickly to other business.

As it turns out, there's a site that can help you tell if such awesome predictions do ever occur: TimerTrac (www.timertrac.com) measures the performance of nearly 600 market timers and is steadily adding new contenders.

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Just a matter of time

December 16, 2006

From The Hindu Business Line:
"Is it a good time to invest now?" A question very few equity market investors would not have asked. Most investors seeking to dip their toes in the stock market think they should `time' the market.

But what is market timing? Quite simply, it is trying to identify the best time to enter and exit stocks. Why time the market? Primarily because most of us believe that investing in stocks can only yield good results if only you get in and get out at the "right time."

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Fosback's seasonal market-timing method still has enviable track record

November 24, 2006

From MarketWatch:
Like the Energizer Bunny, the timing system based on the stock market's month-end and pre-holiday seasonal patterns keeps on chugging along.

This timing system was inaugurated in the early 1970s by Norman Fosback, editor of Fosback's Fund Forecaster. Far and away, it's the best-performing timing system of any that the Hulbert Financial Digest has tracked since 1980, when the HFD commenced publication.

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Don't head to investment 'sidelines' after new market high

November 23, 2006

From The Mountain Mail:
The Dow Jones Industrial Average - the best-known measure of the stock market - recently closed at a record high.

For some investors, it was cause for at least mild celebration. For others, it might have brought back painful memories - and triggered the urge to take a break from investing.

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Savoring a Small Victory After a Market Timing Scandal

November 17, 2006

From The New York Times:
Frederick J. O’Meally, a former Wall Street broker who made millions for himself and Prudential Securities Inc. through market timing, seems happy.

Last month, Wachovia wired nearly $3.8 million into his account, a result of an NASD arbitration.

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Spitzer's Swansong? N.Y. A.G. Hits Fund For Market-Timing

November 17, 2006

From FIN Alternatives:
He’s preparing to move into the Governor’s Mansion, but outgoing New York Attorney General Eliot Spitzer has some unfinished business to attend to.

On Thursday, Spitzer filed suit in Manhattan against hedge fund Samaritan Asset Management Services, its adviser, Johnson Capital Management, and top executives Edward Owens and Michael Johnson, alleging they evaded market-timing monitoring systems by “piggybacking” their trades on retirement plan trades through Security Trust Company. STC’s top officers pleaded guilty last year in a case brought by Spitzer.

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Bank of NY in pact to settle SEC market-timing probe

November 6, 2006

From MarketWatch:
Bank of New York Co. (BK) said Monday that it has reached agreements "in principle" with the Securities and Exchange Commission related to the agency's investigation of matters involving possible market-timing transactions and an auction agent.

The company previously disclosed that the SEC was investigating possible timing transactions cleared by its unit Pershing LLC and "the company's role as auction agent in connection with certain auction rate securities."

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Market timing vs. time: Which investment strategy works for you?

November 3, 2006

From The San Diego Source:
When returns don't meet expectations or markets turn downward, some investors feel the urge to become more active by trying to identify the best times to be in or out of the market. True, many portfolio managers and other professional investors often try to predict the optimal time to buy and sell. But that same strategy can easily backfire for individual investors, potentially leaving them with lower long-term returns than would have been realized if they had held on to investments through thick and thin. In other words, time in the market -- not market timing -- may be a long-term investor's best ally.

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Ex-PIMCO exec settles SEC market timing charges

October 26, 2006

From Reuters:
The former chief executive of the PIMCO equity mutual funds agreed to pay $572,000 to settle charges that he gave a hedge fund special trading privileges, U.S. regulators said on Thursday.

Stephen Treadway, who was CEO of several PIMCO entities including PIMCO Advisors Fund Management LLC, was found liable in a federal civil court case in June for securities fraud, the U.S. Securities and Exchange Commission said.

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Market timing: a scientific approach

October 24, 2006

From IBN Live:
There is a common saying in the market that ‘you make profits when you sell, not when you buy’.

This simple statement underlines some of the key behavioral aspects of investing. If one were to understand, appreciate and follow this statement, making money at the stock markets would become easier and surer.

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Brokerage Sanctioned for Market Timing

October 13, 2006

From The Houston Chronicle:
Wall Street Access, a registered broker-dealer, was sanctioned for allegedly allowing its customers to market time mutual funds, the Securities and Exchange Commission said Friday.

Regulators also claim the brokerage firm allowed one hedge-fund client, which it didn't identify by name, to engage in late trading in mutual funds. Over a six-month period in 2001, the SEC said Wall Street Access accepted and executed more than 2,000 such trades and broker Gene Mancinelli used "deceptive tactics" to conceal the identity of the customers behind them.

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SEC's Market-Timing Rule To Kick In

October 12, 2006

From Yahoo! News:
It's called Rule 22c-2. The Securities and Exchange Commission expects it to be a key weapon in the battle against abusive market timing by rogue shareholders. Its first requirement is about to go into effect.

And arrival dates have been set for additional firepower.

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Spitzer sues Seligman for market timing

September 27, 2006

From InvestmentNews.com:
New York Attorney General Eliot L. Spitzer is suing mutual fund manager J. & W. Seligman & Co. over alleged secret market timing arrangements that he says skimmed $80 million off small investors.

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'Stale' or 'Sticky' -- What Motivates Late Trading and Market Timing in Mutual Funds?

September 20, 2006

From Knowledge @ Wharton:
Three years ago, the business scandal spotlight moved to a new industry when mutual funds were accused of allowing favored customers to engage in late trading and market timing that hurt ordinary investors. Since then, fund companies and individuals have paid more than $4 billion in restitution and fines, and regulators have been searching for ways to prevent or discourage short-term fund trades.

But although the scandal has subsided, some questions about these strategies have gone unanswered. Is short-term trading encouraged by the use of out-of-date, or "stale," stock prices in valuing fund shares? Will remedies such as redemption fees, mandatory holding periods and "fair-value pricing" work? And can they work without penalizing ordinary investors?

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STANLIB MM offers a market timing solution

September 18, 2006

From MoneyWeb:
INVESTMENT advisers face a market timing dilemma as clients prepare to move back into the market after a period of volatility.

Typically, the client makes the timing decision and entrusts implementation to the adviser, but if the time of re-entry is less than opportune, the intermediary may be blamed for not foreseeing a further dip in equity values and warning the investor. 

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Market-timing settlements will hardly be a windfall for investors

September 17, 2006

From The San Francisco Chronicle:
The third anniversary of the mutual fund late-trading and market-timing scandals passed at the start of September virtually ignored.

Truth be told, it's a story that the industry wants to move past and that most observers have grown tired of telling, mostly because the outcome remains a bit vague and unsatisfactory after all these years. In the last few months, however, one key piece of the puzzle became a bit clearer, even if it fails to make most fund shareholders particularly happy. 

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Dear reader, don't play George Soros

September 11, 2006

From CNN Money:
If you're talking about a relatively small sum of "mad money" that you can afford to play around with, then there may be little or no harm in trying your hand at a bit of market timing.

In fact, as long as you restrict yourself to sums of money that won't jeopardize your financial security, I suppose this go-with-your-gut approach could even be helpful in a roundabout way. Maybe by tracking your results - which I fully expect will be underwhelming over any lengthy period - you'll see why jumping in and out of the market is largely an exercise in futility.

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SEC Declines To Challenge Dismissal Of Market-Timing Case

September 1, 2006

From Easy Bourse:
The Securities and Exchange Commission has declined to challenge one of its administrative law judges, who last month in a rare rebuke for the agency had dismissed a mutual fund market-timing case.

Former Canadian Imperial Bank of Commerce (CM) managing director Paul Flynn was accused of helping hedge funds finance mutual fund trades that shortchanged the mutual fund investors.

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Prudential Agrees to Market-Timing Settlement

August 27, 2006

From TheStreet.com:
A long-running probe into alleged market timing at Prudential Financial (PRU - commentary - Cramer's Take) is expected to come to a close Monday, according to a weekend media report.

Federal and state regulators are expected to announce a civil settlement Monday with the company's securities unit, according to a report in The Wall Street Journal late Friday that cited two people familiar with the situation.

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Timely investing, not market timing

August 20, 2006

From The San Francisco Chronicle:
Q: In past columns you have mentioned that it may not be wise to try to time the stock market and that a sound, simple way to invest is through a Standard & Poor's 500 index fund. However, if someone dives in and invests all his saved-up cash at once in such a fund, isn't he, in effect, timing the market? Is there a better way to do it?

A: You might find it more comforting to use a popular investment method called dollar-cost averaging. With this method, an investor puts identical sums of money into securities at certain intervals -- say, once a month. So when the securities are relatively low-priced, the investor buys more shares than when the securities are relatively high-priced.

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Market-timing case timely message to small investors

August 6, 2006

From The Seattle Times:
Martha Stewart complained that she was almost trampled by the scrum of reporters at her trial on charges she lied about a stock sale.

Stephen Treadway's trial, in the same Manhattan federal court, was considerably quieter, although the civil charges against Treadway were of far greater importance to average investors.

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Law judge clears Larchmont man but appeal possible

August 4, 2006

From The Journal News:
An administrative law judge cleared a former Canadian Imperial Bank of Commerce official from Larchmont of civil charges that he knowingly helped two hedge funds make improper trades of mutual fund shares.

Judge Robert G. Mahony, ruling on a lawsuit brought by the U.S. Securities and Exchange Commission, ruled that Paul A. Flynn was not aware that he was helping Canary Capital Partners LLC and Samaritan Asset Management make so-called market timing and late day trades.

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SEC accuses three ex-Janus executives of allowing market-timing trades

August 2, 2006

From USA Today:
The Securities and Exchange Commission has accused three former executives of Janus Capital Management of improperly allowing market-timing trades in the company's mutual funds.

SEC documents released Monday said the agency is seeking unspecified fines and sanctions against Warren Lammert, Lars Soderberg and Lance Newcomb for allegedly allowing rapid trading in Janus funds despite company rules that discouraged it. All three have left the company.

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Time in the market, not timing the market

July 25, 2006

From DNA Money:
Almost 10 years back, he had started investing a regular amount of Rs 5,000 in the growth option of Reliance Growth Fund. He made this investment on the first of every month. During those days, as even now, equity investing was all about market timing. Market timers are basically investors who try to enter or leave the stock market on the basis of where it is headed. They essentially try to spend a lot more time trying to figure out which way the market is headed.

He never believed in market timing. “What is the right level for the market at any point of time?” His answer to this question was, “Who knows, at least I don’t.”

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Money Manager Agrees to Settle Regulators’ Market-Timing Case

July 25, 2006

From The New York Times:
The money manager Waddell & Reed Financial agreed yesterday to a $77 million settlement to resolve regulatory claims that it allowed certain clients to make improper trades.

The company, based in Overland Park, Kan., will pay back $50 million to shareholders. It also agreed to cut fees on its Advisors and Target funds by $5 million a year for five years, and to pay a $2 million fine that will be used to educate investors. Waddell & Reed neither admitted nor denied the regulators’ accusations.

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Funds Still Dealing With Market Timing

July 11, 2006

From MSN Money:
Martha Stewart complained that she was almost trampled by the scrum of reporters at her trial on charges she lied about a stock sale. Stephen J. Treadway's trial, in the same Manhattan federal court, was considerably quieter, although the civil charges against Treadway were of far greater importance to average investors.

Treadway, former chairman of the board of trustees of the Pimco equity funds, was the defendant in the first mutual fund timing case to go to trial. On June 30, a jury found him liable for defrauding Pimco equity mutual fund investors through a market timing arrangement with hedge fund Canary Capital Partners LLC. Treadway faces possible civil penalties and other sanctions.

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Alger to Shell out $40M to Settle Market-Timing Charges

June 15, 2006

From Wolters Kluwer:
Fred Alger Management announced that it has settled with the SEC and New York Attorney General Eliot Spitzer to the tune of $45 million in reimbursements, fines and fee reductions. The firm is settling charges that it allowed certain investors to improperly market time its mutual funds.

The settlement brings to a close one of the last, as well as one of the more eventful, market-timing cases.

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The key is 'time in' the market, not 'timing' the market

June 14, 2006

From MoneyControl.com:
‘Investing in the stock market is one of the most risky avenues to park your savings’. ‘Stock markets deliver the highest returns amongst all asset classes’. All of us know people who would swear by any one of the above two statements. In fact most of us can be grouped into two categories based on the above statements. Now it’s not possible for a group of people so highly opinionated to be fundamentally wrong and yet both the arguments can be debated at length.

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The right way to 'market-time'

June 5, 2006

From CNN Money:
QUESTION: The stock money I have in taxable accounts is invested mostly in widely diversified index funds. But for my tax-deferred funds, I'm considering using an investment newsletter's "tactical asset allocation" system, which exploits market trends by moving back and forth between stock and bond mutual funds. Do you think I should go ahead with this plan?

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SEC Re-files Suit Against Two Execs

June 5, 2006

From Wolters Kluwer:
The SEC recently announced that it has re-filed an enforcement action in Massachusetts federal court against two former executives of Columbia Funds Distributor, Inc., a Boston-based broker dealer. James Tambone of Wellesley, the former co-president of Columbia Funds, and Robert Hussey of Bedford, the former managing director for national accounts, were allegedly involved with undisclosed market timing arrangements in the Columbia complex of mutual funds.

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Market timing and those feel-good factors

May 2, 2006

From Stuff.co.nz:
Imagine buying a property or share at the very bottom of a cycle, and then selling out at the very top of it.

The big rewards must explain why so many portfolio managers and investors engage in some market timing, even though research suggests it is a mug's game.

Market timing has a way of trapping the investor into doing the wrong thing.

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Can Market Timing Ever Succeed?

April 29, 2006

From NZCity:
The big rewards must explain why so many portfolio managers and investors engage some market timing, even though research suggests it’s a mug’s game. Market timing has a way of trapping the investor into doing the wrong thing.

Looking back at market history, there have been far fewer successful market timers than successful asset selectors, and even the few successes that can be attributed to market timing are more attributable to luck.

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Stock Market Research, Market Timing and Technical Trading Signals on over 1300 Stocks

April 29, 2006

From TMCnet:
Investing Systems announced today the addition of a new Platinum Level of service backed by the technical trading signals from Stock Traders Daily.

"We could not be more pleased than to offer the exceptional services provided by Thomas Kee and his group at Stock Traders Daily," said, William McKinley, President of Investing Systems. "The services they offer really empower individual traders with timing, strategies even automated trading alerts."

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Investment strategies for a secular bear market

April 14, 2006

From Ledger Dispatch:
During the time period between 1982 until 2000, American stock investors found that the best equity strategy was to buy either individual stocks or stock mutual funds and just hold their investments, riding out any downturns, as it did not take long before stock prices just climbed to new all time highs. Each bear market turned out to be another buying opportunity.

Many investors have continued to follow the same investment strategy during the bear stock market from 2000 thru October 9, 2002. However, if this last bear market was just the beginning of a secular bear market, then strategies other than the buy and hold will work better. During a secular bear market it may take 15 or 20 years before stock market indexes will finally stay above previous market highs. During a secular bear market investors will usually have several buying opportunities, only to find another bear market just around the corner, leaving the overall tenure of the market less than positive.

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"Buy and Hold" vs. "Market Timing" in Real Estate??

April 12, 2006

From Elliott Wave International:
After the dot-com bubble blew up in 2000, "buy and hold" vs. "market timing" provoked a lot of debate among investors, though the argument always had to do with the stock market.

What's interesting is that the past two years failed to produce a similar discussion about real estate: Questions over buy and hold vs. market timing in that market now look a lot more relevant, given the number of people who imagined that they could "flip" an overpriced 3-bedroom home as easily as they qualified for the interest-only mortgage.

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CORRECTED-Ex-Fiserv broker settles market timing case

April 10, 2006

From Reuters:
In WASHINGTON story headlined "Fiserv broker settles market timing case," please read in headline "Ex-Fiserv broker settles market timing case" (corrects to show broker no longer holds the position).

A corrected repetition follows.

WASHINGTON, April 10 (Reuters) - A former Fiserv Securities Inc. broker has agreed to pay $100,000 and be barred from association with any broker or dealer to settle market timing charges, the U.S. Securities and Exchange Commission said on Monday.

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