Market Timing

Market Timing is basically the ability to move in and out of the market as it fluctuates.  This can reduce risk by keeping conservative investors on the sidelines during downturns while getting them in during bull markets.

At its most fundamental level, market timing is a tool for managing risk. If markets never went down, or if investors never got nervous about paper losses, timing might not be necessary. But as the stock market has always shown, major losses can happen when many people don’t expect them. The bottom of a market cycle is when sentiment is the gloomiest; few people feel like buying, even though they will later realize that is just what they should have done. Likewise, the peak of a market is when enthusiasm is highest; few people feel like bailing out, even though later many will wish they had.

In an ideal world, a timing system would alert an investor to the perfect time to buy, at the lowest possible price, and the perfect time to sell, at the highest possible price.  

It’s unrealistic to expect any system to tell you the best times to get in and out of the market. A more reasonable goal, however, is to identify times when, based on historical patterns, technical charting, and fundamental analysis, where the probability is higher for gains than losses (a buy signal) or vice versa (a sell signal).

Mutual Funds

A Mutual fund is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, or other securities.

Investors purchase mutual fund shares from the fund itself (or through a broker for the fund), but are not able to purchase the shares from other investors on a secondary market such as the New York Stock Exchange or Nasdaq Stock Market. The price investors pay for mutual fund shares is the fund’s approximate per share net asset value (NAV) plus any shareholder fees that the fund imposes at purchase (such as sales loads).

Mutual fund shares are "redeemable," which means that when mutual fund investors want to sell their fund shares, they sell them back to the fund (or to a broker acting for the fund) at their approximate per share NAV, minus any fees the fund imposes at that time (such as deferred sales loads or redemption fees).

Mutual funds generally sell their shares on a continuous basis, although some funds will stop selling when, for example, they become too large.

The investment portfolios of mutual funds typically are managed by separate entities known as "investment advisers" that are registered with the SEC.

Timing and Rydex

Our firm recommends the use of Market Timing with Cooper Linse Hallman Capital Management, Inc., (CLH), an Illinois Registered Investment Advisory firm.   CLH utilizes the Rydex Investment family of mutual funds. 

Since its inception, Rydex Investments has proven to be a leader in developing specialized investments that are essential components of a modern portfolio. Through continuous innovation, Rydex has striven to anticipate the evolving needs of private investors. Rydex is committed to helping investors and investment advisors maximize the value of our investing tools and strategies and to providing an outstanding level of customer service.

Rydex manages more than $16 billion in assets via more than 80 mutual funds and exchange traded products.