Introduction

Market timing doesn’t work! At least that’s what some people would like you to think. The Random Walk Theory and the efficient market hypothesis tell investors market timing is a fool’s game. Academics have made careers out of ridiculing market timing. Mutual fund companies have issued hundreds, if not thousands, of reports deriding market timing while extolling “buy and hold,” pointing out the investment disaster that awaits any investor who happens to miss the biggest up days in a bull market. (Curiously absent are similar reports about investment performance when missing the biggest down days.) Without a doubt, successful market timing is not easy. But it’s not impossible, and when properly applied, market timing can generate ...

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