It Can Really Pays Off With Market Timing

The traditional Buy and Hold approach to your best stock picking service or following short term stock picks recommendations may not be enough to ensure profitability for your portfolio. Market timing can greatly improve the profitability of your portfolio.

You've probably heard the saying "Sell in May and Go Away" but didn't do anything about it. Research suggests you should think again. Many researchers and investors have found that over the long term, investing in stocks is one of the most preferred strategies for accumulating wealth. Your parent's have no doubt told you how their best stock picking service have soared since they first bought them. If you had bought the S&P500 index at the start of 1995 and held to the end of 2006 you would have gained 119%. Perhaps you could have done even better with your own best stock picking service or short term stock picks recommendations. However, this strategy doesn't come without sleep-less nights and some significant set-backs. Considering that the S&P500 is still trading lower than it's high in 2000 a lot of patience can be required. Your results and risk could be improved by using a market timing tool to help determine when to get in and out of the market.

While looking for some best stock picking service and short term stock picks recommendations I came across one of these systems recently, using that saying "Sell in May and Go Away" and decided to look into it. The results were really intriguing. For the past 56 years, some months have definitely been better to be in the market than others. Not only that, the most profitable months are grouped together, nice and conveniently for us.

Using this information we can deduce a simple market timing method based on 56 years of historical data. (significantly more back-testing than any short term stock picks service you could find)

We could simply buy the index at the beginning of our run of historically proven 'good' months and get rid of them at the conclusion. This simple strategy would have gained 126%, a mere 7% more than simply buying and holding. It also dodged many of the large drops experienced by the market, providing us with a much smoother curve of returns. Sure, beating the index by 7% doesn't sound that fantastic. If we had reinvested our account balance each year our system would have returned 20% more than the index, simply by evading some of those huge market declines and giving us with a more consistent rate of return.

So, not only have we performed better than the index by 20% by investing in the 'good' months, we have accomplished it in just 7 months. The final 5 months of the year our money can be safely stashed aside. At the very least for those 5 months that are historically 'bad' we could be a little more vigilant with our best stock picking service or short term stock picks recommendations.

An option to reflect on then, when our first 'good' month comes around and it is time to invest in the market, could be to find some best stock picking service recommendations or do some internet investigating on short term stock picks to gives us some tips to make even more from our 7 months in the market.

Next time you are looking at your best stock picking service, or considering subscribing to a short term stock picks service reflect on this simple market timing model to boost your portfolio's return.

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