The Plain Truth About Market Timing

[Bill Lussenheide]

Many believe that the use of a timing trading strategy is futile or even a
deterrent to a profitable portfolio. I tend to agree if you are talking
about a non-defined strategy of just going by your moods or the stars or
some other non mathematical approach.

The cynics say that if timing took you out of the market during only the
very best days or the very best months of some longer period, your
performance would greatly underperform just buying and holding the overall
market. At first glance this seems self evident.

However, what is not fair about these statements is the discounting of the
idea of avoiding the WORST market days or months! You cannot just view the
idea of missing out on the best days of the market, unless you offset this
view by factoring in the results by missing out on the worst days or months
of the market on an equal basis.

Missing the worst periods has profound impact on long-run compounding. The
Plain Truth is that it is more important to avoid the worst days or months ,
than it is to participate in the best days or months!

Learn more about how avoiding losses is more important than making gains,
and view the accompanying chart demonstrating this amazing offset in my
free article at:

http://www.InvestmentWarrior.com

(CLICK ON THE NEWSLETTER ICON & THEN "MONTHLY ARTICLE")

Bill Lussenheide