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What is MarketTiming?
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Virtually every investor "times" the market. Market timing is the most common strategy in use today, even by the "experts." Timing simply means buying low and selling high in an effort to buy before the markets go up and sell before the markets go down. All markets fluctuate and market timing is aimed at taking advantage of it. Recent fraudulent activities by mutual funds and others have mislabeled some forms of market timing as fraudulent. However, the practice done legally, is neither fraudulent nor unethical. In fact, the very movement of the market is a function of investors and speculators trying to buy low and sell high - the very definition of market timing. TimerTrac.com measures the success of "timers." |
| Some Examples of Market Timers | |
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| Mutual Funds | Most mutual funds have 'turnover' rates of 50% or more per year. That means they buy and sell 50% or more of their securities every year in an attempt to sell "overvalued" securities and buy "undervalued" securities at the right "time." Fraudulent activities such as after hours trading should not be referred to as "market timing." "Mutual fund fraud" is a much better definition. |
| Major Brokerage Firms | Major brokerage firms continually issue "Strong Buy, Buy, Accumulate, Hold, Sell," and other evaluations such as percentages you should hold of stocks, bonds, and cash. This effort takes advantage of the markets at the right "time" and is clearly market timing. |
| Institutional Investors | Pension Plans and 401K plans hire professional portfolio managers to be in the right securities at the right "time." |
| Day Traders | This is where it's obvious. Day traders work all day trying to buy low and sell high. |
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At the present time TimerTrac.com focuses on Long-term, Intermediate-term, Short-term, and Fast Timing as defined below. Currently TimerTrac.com does not follow what we call Trading. |
| Typical Timing Periods* | |
|---|---|
| Long-term | Investors who hold securities longer than one year or more. (This is the IRS definition.) |
| Intermediate-term | Investors trading anywhere from about 3 to 12 times per year. |
| Short-term | Investors trading anywhere from about 12 to 50 times per year. |
| Fast Timing | Investors trading a few times a week or less. |
| Trading | Investors trading multiple times per day. |