It has always been our contention that to be successful in the stock market one must have a tested, disciplined strategy that has proven itself over time. This simple concept is infinitely more important than occasionally being on the wrong side of the market. The cornerstone on which we have built our methodology is the preservation of capital. Unfortunately, in bull markets, the value of this basic concept is often lost, but its value is readily apparent in bear markets.

Since it is impossible to predict the tops and bottoms of the market, we do not base our market timing on those events. The Chartist models are geared towards identifying long-term trends and then positioning ourselves in high relative strength mutual funds and ETFs when the odds favor an up-market. When our models warn of a potential long-term decline, we then exit the market and move to the safety of money market funds.

While the primary goal of market timing is to preserve capital, the primary benefit of market timing is to reduce risk. Far too many investors have unrealistic goals in mind when they start an investment plan. An investor armed with the facts regarding their plan will be better prepared to ride out the ups and downs of the market on a more even keel. This helps reduce anxiety in investment decision-making and, in turn, hopefully, improves results.