all about market timing the easy way to get started - masonson 2004

[...]... by Leslie M Masonson Click Here for Terms of Use This page intentionally left blank C H A P T E R 1 The Stock Market = Bull Markets + Bear Markets The first rule is not to lose The second rule is not to forget the first rule Warren Buffett 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... market without getting heart palpitations, without losing all their profits, or worse, their initial capital, and without getting physically or mentally sickened by their losses? That is what this book is about All About Market Timing will provide you, whether you’re a beginner or more advanced investor, with easy- to- understand, timetested market- timing strategies that work Timing will help you to make more... halt when the big bear started growling in the first quarter of 2000 The bear then unceremoniously clawed the market over the next three years, to prices not seen for five years Investors Are Too Emotional and Overconfident The stock market is a very difficult place to make money This is not a new thought Over the past 100 years the stock market has been The Stock Market ϭ Bull Markets ϩ Bear Markets... occurrences to get on the right side of the market rather quickly by determining the readings of all these indicators and looking for a consensus xxiv INTRODUCTION Chapters 7 through 11 are the heart of the book They provide specific market- timing strategies that can be used to beat buy and hold with less risk—always a great combination First, Chapter 7 reviews easy- to- use strategies, focusing on the best... buy-and-hold crowd Another critical premise is that the safest way to invest in the stock market is to be “out” of the market in a cash account (or to be short the market) , during declining periods, and to be “in” the market only during the most favorable time periods This completely contradicts what some experts will tell you You will hear “It’s time in the market that counts, not timing the market. ” I will... in bull markets and especially in bear markets This is a daunting task for any investor, since many studies have shown that the majority of investors neither equal nor beat the market averages nor do they equal the performance of the mutual funds that they’ve purchased They don’t because investors act emotionally, and they swing between the fear of a market downfall and the greed for making the most... index funds, sector funds, or exchange-traded funds My objective in writing All About Market Timing is fourfold First, I want to provide you with the rationale and facts indicating why market timing is a superior investment strategy compared to the ever-popular buy-and-hold strategy Second, I want to provide you with profitable market- timing strategies that are simple to understand and easy to implement... provided HOW TO USE THIS BOOK If you are new to investing or are not familiar with market timing, then I recommend that you read the book chapter by chapter On the other hand, if you are very experienced with the stock market and index funds, and if you are already convinced of the merits of market- timing, then I recommend that you can go directly to Chapters 7 through 11 for the recommended market- timing. .. subscribing to a market- timing newsletter or using a markettiming advisor instead of using a self-directed timing strategy, then Chapter 12 is for you Those investors who prefer coming up with their own market- timing strategies or performing further testing of the strategies mentioned in this book will want to check out Chapter 13, then Chapters 7 through 11 You can read the other chapters when you have the. .. have a market timer do the work for you, you’ll be interested in the information provided on topperforming market- timing newsletters and market- timing advisors After reading this book you will understand both sides of the buy-and-hold myth and why market timing is a more sensible, riskaverse, and unemotional approach to investing in the stock market I do not recommend that investors buy individual stocks, . 1:33 PM Page 1 , ALL ABOUT MARKET TIMING The Easy Way to Get Started FM _Masonson1 4133 1-6 8/27/03 10:24 AM Page i OTHER TITLES IN THE ALL ABOUT . . .” FINANCE SERIES All About Stocks, 2nd edition by. Brown All About Exchange-Traded Funds by Archie Richards FM _Masonson1 4133 1-6 8/27/03 10:24 AM Page ii ALL ABOUT MARKET TIMING The Easy Way to Get Started LESLIE N. MASONSON McGraw-Hill New York Chicago. compared to the ever-popular buy-and-hold strategy. Second, I want to provide you with profitable market- timing strategies that are simple to understand and easy to implement. Third, I want to help