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Market Timing Q and A

Successful Market Timing Strategies

A full understanding of our market timing strategies, and the emotional tug of war that all market timers experience, is crucial to success.

This page should answer most questions for those who are new to market timing, or new to Fibtimer. We hope you will take the time to study it carefully, as well as the recommended reports described below.

Successful Market Timing With Fibtimer helps subscribers determine which market timing strategy is best for their needs, and also offers detailed instructions on trading our timing strategies. Are you an aggressive, active or a conservative investor? It is best to know before you start a market timing strategy.

The Case For Market Timing Diversification tells you how to diversify within market timing strategies. Combining several good market timing strategies can make all the difference during the inevitable sideways markets that test the patience of even the most experienced market timers.

Please read "this" Questions & Answers page first, but then study the above reports. They will help you become a successful market timer, as well as to achieve your investing goals.

Is every trade profitable?
What is risk management?
Which market timing strategy is best for me?
Letters from Subscribers
When are subscriber's reports published?
What are "Fibtimer Alerts" and when are they sent?
Do you reverse positions?
I am a new subscriber and Fibtimer is already in the middle of a trade.
    How do I start?
Which mutual funds do you use?
What does it take to be a market timer?

Is every trade profitable?

Any market timing service that guarantees that every trade will be profitable (or promises unrealistic gains) should be avoided. Successful market timing requires strict adherence to a trading strategy. Not all trades will be profitable. This is a fact of life when trading the financial markets.

Our market timing trading strategies identify trends, and once confirmed, we take either a bullish or bearish (depending on strategy) position. We use strict risk management in all of our trades.

Our aggressive market timing strategies may trade several times a month in trendless markets, and during trending markets they may go months between trades.

On the other hand, our longer term Conservative Timing Strategies can go a year or more between signals as they keep investors fully invested during long term uptrends, and in cash (money market funds) during long term declines.

What is risk management?

Risk management is the mainstay of our market timing strategy. Not all trades will be profitable. We never allow losses to accumulate. Before we take a bullish or bearish position, we know exactly what our risk and exit strategy is, and every subscriber knows it too.

Which market timing strategy is best for me?

Know must first understand which market timing strategy best suits your investment needs!

Read Successful Market Timing With Fibtimer which will help you decide.

Our "Aggressive" market timing strategies will always generate a larger number of buy and sell signals than a longer term (or buy and hold) strategy. So, a longer term perspective should be used to judge performance. Subscribers who trade our aggressive market timing strategies should understand what such trading involves. When we say aggressive, we mean aggressive. Multiple trades are a common occurrence.

Our market timing strategies make large profits in trending markets and provide risk management in sideways markets. Market timing mutual funds requires commitment. Mutual fund market timers must be willing to stay the course to reap the benefits.

If aggressive market timing is not something you will be comfortable with, you should use our Conservative Strategies which trade infrequently, but yet successfully keep subscribers fully invested during long term advances, while protecting them in cash (money market funds) during long term declines.

Letters from Subscribers

Take a moment to read some emails from subscribers who have been with us awhile. To read them, click here.

When are subscriber's reports published?

Comprehensive timing reports are published each weekend, by mid-afternoon Sunday. They are emailed to all subscribers as well as posted to the password protected area of the website. Four of our strategies have daily updates. The ETF Timer, Sector Timer, Diversified Timing Portfolio and Stock Timer market timing strategies are updated after the close every trading day.

What are "Fibtimer Alerts" and when are they sent?

When any midweek change in any of our mutual fund market timing strategies occurs, we send an emailed "Fibtimer Alert" to all subscribers, usually between 6-7PM, EST, and always by 9PM, EST, the evening "before" subscribers actually execute that change. Our alerts are specific, and explain exactly what should be done.

Do you reverse positions?

Only our aggressive market timing strategies reverse positions (move from a bullish position immediately to a bearish position, or vice-versa) when our market timing indicators say a change in trend is occurring. Our active and long term strategies move to cash (money market funds) during bearish signals.

I am a new subscriber and Fibtimer is already in the middle of a trade.
         How do I start?

We usually recommend that new subscribers await the next trade. Entering a trade after it has already begun may be profitable, but the risks are higher. It is up to you, but it is usually better to wait. More information is available about mid-signal entries in this report: Successful Market Timing With Fibtimer

Which mutual funds do you use?

---- Active Market Timing Strategies ----

  • Our Bull Pro Timer strategy usually follows the same buy and sell signals as the Bull & Bear Pro Timer strategy, but when a sell signal is issued, the Bull Pro Timer moves to cash (money market funds). During times of extreme volatility, the strategy may trade less frequently to reduce risk. This market timing strategy is excellent for active timers who are trading mutual fund accounts that do not offer bear funds, or for those who just do not like the volatility of reversing from bullish to bearish funds, and back again. Using Rydex funds is NOT required. Many of our subscribers use the equivalent Pro Funds which work equally well, or S&P and OTC index funds from many other fund companies.

  • In our Sector Fund Timer we follow a wide variety of "Industry Specific Funds" such as those offered by Rydex, ProFunds, Fidelity and others. Timing for each industry is based on proprietary "industry specific" market timing trend indicators that Fibtimer monitors daily. In our subscriber reports, we use the Rydex Sector Funds to measure performance. The Sector Fund Timer report is updated daily.

  • The Small Cap Timer market timing strategy follows the Rydex Mekros Small Cap Fund. Other small cap index funds should work as well. We only track bullish positions using the Rydex Mekros Fund and Russell 2000 Index as our basis. When we are in a bearish position, subscribers should use a cash position. Aggressive subscribers may use bearish small cap funds, but in our experience, the volatility in small caps will often result in losing bearish trades, so we do not use or track bearish positions in the strategy.

  • In our Gold Timer market timing strategy we follow the Rydex Metals Fund. Other gold index funds may be successfully used. We do not trade, nor do we measure results during sell signals in the Gold Timer as there are no known bearish gold funds.

  • Our Diversified Timing Portfolio uses a mix of strategies to even further reduce volatility. Currently, we allocate 20% to the Bull & Bear Pro Timer signals and 80% to sector Timer signals. This is an active strategy and does require that subscribers check the report each day at least once for possible trades.

    ---- Conservative Market Timing Strategies ----

  • Our Conservative S&P Timer is our most conservative timing strategy, generating signal changes only once a year, or even less. It is designed to keep investors fully invested during long term advances, and in cash (money market funds) during long term declines. Subscribers may use most diversified U.S. stock funds for this strategy. Even diversified small cap funds work well and we track the Vanguard Index Trust Small Cap Fund on the Conservative Timer Trade History page.

        Typical funds used by subscribers (small selection) for the Conservative Timer are: Dreyfus BASIC S&P 500 Index Fund, Spartan 500 Index Fund, Fidelity magellan Fund, Fidelity Blue Chip Growth Fund, Strong Index 500 Fund, T Rowe Price Equity Index Fund, Vanguard Index Trust 500 Fund, American Century Ultra Fund, Rydex Nova Fund, etc.

  • The REIT Timer is a long term conservative market timing strategy that can be used with REIT index funds at most mutual fund families. In our report we use the Morgan Stanley REIT Index (MFS) to track results. The REIT Timer is designed to keep investors fully invested in REIT index funds during long term advances, and in cash (money market funds) during long term declines.

    ---- Aggressive Market Timing Strategies ----

  • In our Bull & Bear Pro Timer strategy, we use the Rydex OTC and Rydex Nova Funds to measure bullish positions, and Rydex Arktos or Rydex Ursa Funds for bearish positions. Starting in year 2008, signals for active traders who go to cash (money market funds) will also be included in this strategy. Each position is used for 50% of the portfolio to reduce volatility. Using Rydex funds is NOT required. Many of our subscribers use the equivalent Pro Funds which work equally well, plus S&P and OTC index funds from many other fund companies.

  • Our Bond Timer market timing strategy uses the Rydex U.S. Bonds Fund for bullish positions and the Rydex Juno Fund, which trades inversely to bonds, for bearish positions. Profunds and other bull and bear bond index funds will work as well.

  • The Fibtimer ETF Timer monitors most of the actively traded Exchange Traded Funds (ETFs), and includes the most widely traded ETFs, such as the QQQ, SPY, BBH, OIH, SMH, DIA, TTH, UTH plus many others. Timing for each is based on proprietary market timing trend indicators, "specific" to each ETF, that Fibtimer monitors daily. The ETF Timer report is updated daily.

  • Stock Timer - Although Fibtimer is primarily a mutual fund timing service, we also monitor a very select group of stocks that meet our stringent requirements of trending history, acceptable volatility and liquidity. Stock Timer follows issues selected from the S&P 500 and Nasdaq 100 Indexes, covering a broad array of industries, and picked specifically for their tendency to "trend" for long periods of time. Each stock is market timed using stock specific market timing trend indicators that have resulted in superb profits. The Stock Timer report is updated daily.
  • What does it take to be a market timer?

    Market timing often means going against the prevailing opinion. It also often means taking a bullish position when everyone is bearish, and taking a bearish position when everyone is bullish. Some of the characteristics of a successful market timer are:
  • They are independent and self-assured and don't worry about how they are doing compared with other investors.

  • They accept that sometimes their investments will under perform the market, knowing that over time, they will outperform the market.

  • They accept that market timing will require them to make frequent trades that may seem like mistakes, and a string of successive small losses won't drive them up the wall.

  • They can adopt a market timing strategy for the long haul and stick with it, even when at times it is discouraging.

  • They are able to obey stops, which usually require taking a small loss to protect against a larger one.

  • They can ignore the mass media, which raise emotions and thus increase the risk of not executing a trade. It is often the trade that is hardest to take that winds up being the most profitable.

  • They are decisive and willing to move at a moment's notice, without second-guessing, when a market timing system calls for buying or selling.

  • Perhaps most important and most difficult, they are willing to watch their investments every business day without fail.

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