Timing the markets part 1

I am a big fan of timing the markets. Market timing involves buying low and selling higher and selling high and buying lower. There are many “authorities” on the subject who will not agree with me. Motley Fool states “Trying to time the market isn't a smart idea” CNBC states “Trying to time the market is a losing game”. I could site more articles but I won’t bore you just Google “market timing doesn’t work”.

I do not agree with the experts. I don’t know about you but my parents taught me to time the markets at a young age. From the time I was little my mother would scour the Kroger ad when it came for deals. I dreaded when chicken was on sale. I grew to dislike chicken. Chickens were on sale at the store for 9 cents each limit two per customer. My dad had four chickens on the belt. The lady behind the register said sorry sir limit 2 per customer. My dad told me to stand behind him, took two of the birds and placed them in front of me on the belt and handed me two mercury head dimes and told me to give them to the lady when she asked me to pay. My mom would cut the chickens up and we would eat two that week fresh and freeze the others. Yes others as my dad worked close to the store and would buy more chickens every day. My mother got very creative when it came to cooking chicken. Did you ever have chicken cupcakes? It is cornbread chicken and whatever veggies were on sale. My parents would buy cuts of beef, pork and at times whole turkeys when the price was right. By timing the market in this case the food ad my parents were able to feed our family are a lower price.

How about you have you ever drove by a gas station and saw they raised the price, driven by another gas station that had not raised their price, drove in and filled your tank? If so you have engaged in market timing.

In a similar way any one can time the stock market. The goal of market timing is to beat buy and hold. Most investment advisors like the buy and hold philosophy. They also subscribe to dollar cost averaging which I will discuss in a later post. (I strongly agree with the concept of dollar cost averaging.). Buy and hold means you take a sum of money and buy an investment. Unless you have a life changing event you keep it and do not sell it.

It does not take a lot of thinking to realize that when you fill your tank as described in the example above you are going to save money on your average cost of gasoline. The same can be said when you invest in the market.

So how does one time the market? I do have a complex set of mathematical equations which I use to time the market. I do not recommend this to anyone unless they are willing to put hours of research and practice into timing the market. To get improved results in your portfolio all one must do is add money to the market when you hear on the radio the market is down badly and sell some of your stock mutual funds when the market is at record highs.