Use market timing to generate positive returnswith lower volatility!
Events of the past decade have proven beyond doubt that buy-and-hold strategies don’t work in bear markets. Market timing, however, is extraordinarily effective in declining marketsand it provides positive returns in bull markets, as well.
All About Market Timing, Second Edition, offers easy-to-use market-timing strategies you can weave into your investment approach. And it’s not as complex as you may think. In no time, you’ll master the skills you need to maximize profits while minimizing riskno matter what direction the market takes. Devoid of the incomprehensible jargon and complex theories of other books, All About Market Timing covers:
- The five most profitable strategies for timing the market
- The best market-timing resources available today, from newsletters to Web sites to advisors
- Four indicators for determining the market’s health
- Techniques for timing even the most bearish of markets
About the Author
Leslie N. Masonson, MBA, CCM, is president of Cash Management
Resources and has more than 40 years of experience in investing, trading, and authoring financial books.
Read an Excerpt
All About MARKET TIMING
THE EASY WAY TO GET STARTED
By LESLIE N. MASONSON
The McGraw-Hill Companies, Inc.Copyright © 2011Leslie N. Masonson
All rights reserved.
The Stock Market = Bull Markets + Bear Markets
The first rule is not to lose. The second rule is not to forget the first rule.
In the battlefield that is the stock market, there are the quick and there are the dead! ... The fastest way to take a bath in the stock market is to try to prove that you are right and the market is wrong.
—William J. O'Neil (How to Make Money in Stocks, 2002, p. 54)
ING DIRECT SHAREHOLDER SURVEY
Before covering the stock market's performance in bull and bear markets, let's first begin by reviewing the results of a survey of 1,021 young (ages 21 to 39 years) and old (ages 40 to 65 years) investors conducted by ING DIRECT to obtain their views about investing in the stock market. The study was conducted online from January 7 to 19, 2010, ten months after the market bottomed in March 2009. The survey questioned these investors on the following subjects: confidence and optimism, influencers, motives, barriers, and expected returns.
The key survey findings were as follows:
* 43 percent of those 21 to 39 years of age plan to invest more in 2010 compared with 33 percent of those 40 to 65 years of age.
* 26 percent of younger investors and 28 percent of older investors expect an annual return of between 10 and 20 percent.
* Older investors are leading the trend to become self-directed investors. Almost half (49 percent) of those 40 to 65 years of age have reduced or eliminated their reliance on financial professionals compared with 37 percent of investors aged 21 to 39 years.
* Younger investors currently rely more on financial Web sites and blogs (49 percent) and financial print publications (39 percent) than on financial planners or advisors (35 percent) or brokers (18 percent) for investing advice.
* Investors aged 40 years and older also rely more on financial Web sites and blogs (47 percent) and financial print publications (41 percent) than on planners or advisors (39 percent), brokers (36 percent), and family (19 percent).
* On average, investors think that they need $699 to get started investing.
* Almost half (48 percent) of younger investors think that they need more than $500 to start investing compared with 56 percent of older investors.
* Almost half (44 percent) of those with access to an automated platform that enables investing in small dollar amounts say that you can get started with just $100 or less.
* Almost one-third (30 percent) of the younger group say that their parents had the biggest influence in getting them started investing.
* 17 percent of investors 40 to 65 years of age say that their parents had the largest influence in getting them started investing.
* 81 percent of respondents who own a brokerage account and who are fully employed have a retirement account:
* 34 percent are between 35 and 44 years of age, whereas 77 percent of those with no 401(k) account are older or younger than Generation X.
* 47 percent earn at least $125,000 annually, compared with just 25 percent among those who do not own a 401(k).
* 56 percent have at least a college degree or more education compared with 41 percent among those who do not own a 401(k).
* Over half (52 percent) of investors plan to invest about the same amount in 2010 as they did in 2009, and surprisingly, about 4 out of 10 (37 percent) plan to invest more.
* Just 11 percent say that they plan to invest less in 2010.
* Younger investors are even more optimistic. Forty-three percent of those 21 to 39 years of age plan to invest more in 2010 compared with 33 percent of those 40 to 65 years of age.
* More than 6 in 10 (63 percent) either plan to make no changes in their approach or plan to take a more aggressive approach to what they perceive as a buying opportunity.
* 22 percent say, "I think now is a great time to invest. I'm taking a more aggressive approach."
* Another 41 percent say, "I believe in a long-term view when it comes to investing, so I'm not making any changes to my investments."
* Just 5 percent indicate they have headed to the sideline with their choice of the statement, "It's too risky. I don't want to invest right now." Thirty-one percent say, "I'm more conservative than before, but it's still okay to invest."
* .61 percent of investors expect an annual return of between 5 and 10 percent on their money.
* 26 percent of younger investors and 28 percent of older investors expect an annual return of between 10 and 20 percent. The weighted-average return is 11 percent, considering all responses.
* 45 percent of investors have either reduced or eliminated their use of financial professionals for investing advice. Older investors are leading this trend. Almost half (49 percent) of those 40 to 65 years of age have reduced or eliminated their reliance compared with 37 percent of investors aged 21 to 39 years.
* 62 percent of younger investors indicate that the cost of advice was the reason they reduced or eliminated their reliance on financial professionals for investing advice. By comparison, 57 percent of investors 40 to 65 years of age feel that they can do just as good a job on their own.
* Family members (40 percent) are being used by more young investors for advice than brokers (18 percent). Investors aged 40 years and older also rely on financial Web sites and blogs (47 percent) and financial print publications (41 percent) more than planners (39 percent), brokers (36 percent), and family (19 percent).
SURVEY OF AFFLUENT INVESTORS INDICATES CONCERNS
Let's look at another survey of investors that focuses only on more affluent investors. Merrill Lynch Affluent Insights Quarterly Survey results were based on interviews with 1,000 affluent investors with investable assets of at least $250,000 on June 11 and 29, 2010, and another 300 Americans in each of 14 target markets. The source of this information is a Bank of America press release dated July 28, 2010, sent over Business Wire.
The key findings of their survey are as follows:
* 70 percent of those surveyed do not believe that their retirement plans take into account the potential for unexpected family events (e.g., serious illness, divorce, caring for parents), but 35 percent have adjusted their priorities accordingly.
* 51 percent of couples disagree with each other on making investment decisions, how best to save and invest for retirement, sticking to family's budget, and paying off credit-card debt.
* 51 percent cited "financial know-how" when asked about important life lessons to impart to their children.
* 39 percent of parents were spending more time discussing financial matters with their children in light of current economic conditions.
* 74 percent of parents shared advice from their financial advisor to educate their children.
* 50 percent of respondents had a low risk tolerance and used conservative investment vehicles and strategies; this compares with 52 percent of younger persons (ages 18 to 34 years), who have a similar risk tolerance; 45 percent for 35- to 50-year-olds; 46 percent for 51- to 64-year-olds; and 55 percent for those age 65+.
* Both younger and affluent individuals (56 and 46 percent, respectively) are more conservative investors now than one year earlier.
* 45 percent of respondents are planning to delay their retirement compared with 29 percent in January 2010.
* 69 percent of the affluent want their financial advisor to be proactive with investme
Excerpted from All About MARKET TIMING by LESLIE N. MASONSON. Copyright © 2011 by Leslie N. Masonson. Excerpted by permission of The McGraw-Hill Companies, Inc..
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.
Table of ContentsPART 1: MARKET-TIMING BASICS;
Chapter 1. The Stock Market = Bull Markets + Bear Markets;
Chapter 2. The Buy-and-Hold Myth;
Chapter 3. Market-Timing: What You Need to Know;
Chapter 4. Ten Indicators to Determine the Market’s Health;
Chapter 5. Specialized Mutual Funds: Index, Sector, and Leveraged Funds;
Chapter 6. Exchange-Traded Funds;
PART 2: MARKET-TIMING STRATEGIES;
Chapter 7. Calendar-Based Investing: The Best Six Months Strategy;
Chapter 8. Combining Presidential Cycle Years with Seasonality;
Chapter 9. Using Moving Averages;
Chapter 10. Value Line 4 Percent Strategy;
Chapter 11. Nasdaq Composite 6 Percent Strategy;
PART 3: MARKETING-TIMING RESOURCES;
Chapter 12. Market-Timing Resources: Newsletter, Web Sites, and Advisors;
Chapter 13. Market-Timing Software
Most Helpful Customer Reviews
Of all the books I have read on investing, this book makes it clear that predicting the market doesn't work, but trend timing the market does work. I use one of the services mentioned in this book and know for a fact timing works.
The preponderance of research for the past 100 years or so has demonstrated convincingly that stock markets are pretty efficient and that stock prices move randomly, or almost randomly. That is a strong argument against trying to time the market. Author Leslie N. Masonson disagrees, contending that if you use a few simple techniques to time the market, you can avoid losses and wind up with a more profitable portfolio than if you simply bought a representative selection of stocks and held them, as most financial advisors now recommend. He could have presented more evidence to support his opinion, but he is honest enough to contrast his point of view with the many arguments against attempting to time the market. He acknowledges that timing requires certain staunch character traits that are far from universally present in the investing populace. That is to his credit. Also to his credit, according to us, is the fact that he usefully defines and discusses a number of trading techniques and information sources that even non-investors should know about and that investors should understand.