FAQ 10

DO THE TRENDCALC STRATEGISTS TIME MARKETS?

Market timing is one of the most misunderstood concepts in investing. There are many myths about what market timing is and what it is not.  Sadly, market timing has become a generic pejorative used to describe any and all investment strategies that are anything other than 100% passive buy-and-hold asset allocation.  This is mostly done by investors and advisors who don’t have a true understanding of investing and have had past negative investment experiences and personal failures.    

We define market timing as trying to pick tops and bottoms with an all-in or all-out approach.  This is one of the hardest things to do in the world of investing.  We consider trying to pick tops and bottoms largely a game for fools as it requires an accurate prediction of prices, interest rates, or other market and economy conditions. 

TrendCalc strategies don’t try to time the market.  We rely on the evidence of capital market history and our understanding and experience in following the capital flows into and out of various investments in determining how and when we invest and make changes.  It also has been proven that no one strategy is always successful all of the time.  As such, we incorporate a variety of individual strategies into single multidimensional portfolios. Depending on the individual strategy, if we cannot find favorable enough conditions and positions that meet our disciplined buy-hold-sell criteria, portfolios will naturally tilt toward safer, more conservative allocations. This is not timing, it is smart, active risk management.