Market timing has a bad reputation... which is not completely justified. Opponents say that you cannot be smarter than the market. They argue that you can be lucky a few times but not consistently.
The problem is that the term “market timing” is used for a variety of investing strategies. When you discuss the merits of a market timing strategy, you first want to distinguish between short-term and long-term strategies.
Stock market timing helps to make balanced buy-sell decisions to create great investing returns.
Stock market timing helps me now already for over 8 years to capitalize on the long-term trends that you can see in stock market indices. This market timing system I developed in 2003 has enabled me to benefit from the bull market between 2004 and 2007, to avoid the financial crisis of 2008 and to ride again the trend up between 2009 and today.
Sun Tzu teaches us in the Art of War about the basics of Trend Investing
Sun Tzu was a Chinese military strategist in the 6th century BC. He wrote the famous book “Art of War”. The book has 13 chapters, each dedicated to a different aspect of warfare. What has this to do with outperforming the stock market, you may ask.
In Chapter 10, Sun Tzu gives us the answer: “He who knows when he can fight and when he cannot, will be victorious.” This quote has been the secret behind how also you can outperform the stock market.
A simple long-term market timing system would have saved me a lot of money when I invested a large part of my savings into different mutual funds during March 2000. Two months later in May, such a system would have given me clear indicators to sell my investments at that moment. I would have saved 40% of my savings.
Now I know better and since you are reading this, you can know now better as well. In this blog post I want to show you that it is not just me who says that long-term market timing can gain and save you a lot of money. Below you see a good 8-minute video (not from me) that explains very clearly the concept of long term marketing and how it works.
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When I started with my search for what later would become the Stock Trend Investing system, what was I actually looking for? It was not financial freedom or a way to better the world. The thing I wanted was just to find a way to make money and to avoid losing money on the stock market.
I saw that all stocks moved up and down in tandem. I realized that it will be very difficult to do stock picking. There are so many other people doing that. And all that effort is already incorporated in the market price.
The market inefficiencies are not so much in individual stocks. Looking at market movements, I could see that these inefficiencies occur much more often in all stocks together when stock bubbles inflate or deflate.