Can You Time The Stock Market?

Should you be bullish now? Is this the time to be bearish? Sometimes, it is proper to be out of the market when it is not trending These questions haunt you as an investor. It is a constant mental-emotional struggle you deal with every day.

Can you time the stock market? Financial advisers discourage you from trying to time the stock market. They tell you to study the company's fundamentals, and buy the stock if it looks right to you. To make profits over time, they maintain that you must use Buy and Hold as a method. Although this can work, if you buy the wrong stocks, you will lose. Studying the overall market, you would have lost over 27% over the last 10-years. The S&P 500 index of 500 stocks was used to make this statement - take a look. Does it make sense to hold stocks over a 10-year period and lose money?

Have you used these methods to time the market? Here is a list of trading methods that may sound riduculous to you, but believe me, people use these.

**Buy & Hold - It can work, but hasn't worked over the last 10-years

**Buy a mutual fund and let the "experts" invest your money for you - similar to buy and hold

**Dollar Cost Averaging - Invest a fixed number of dollars in the market every month

**Invest in Utilities - Buy stocks for their dividends

**Turn off your TV and don't listen to the talking heads

**Listen to tips on stocks and great opportunities

**Follow the suggestions Money Magazine

**Purchase ten to fifteen advisory services

Emotions can affect your market timing decisions Find a good timing service that has a history that they display for you to see on their website. Once you have found the service that you like, you should approach it scientifically. To be successful, you will need to take every trade - make sure that the amount you invest is small enough that you can afford to lose it!

Some of these signals will be wrong and you will lose money. Some of the signals will be right, and you will make money. You cannot determine which signals will turn out good and which will turn out bad That is why you need to take every signal. You can see why it is important to limit your investment size to a small amount - you will have to lose some to win some. Keep that investment dollar amount (not shares) constant in every trade. Don't increase it or decrease it depending on how you feel about the signal Don't let your emotions enter into the decision to take the trade.

Can you lose three trades in a row? This can and probably will happen. No stock market timing system is omniscient, Have faith in your market timer - be consistent in following the signals. After a year or so of experience, you will have confidence to take some of your winnings, and increase your position sizes Don't increase the amount too large, or you will become emotional, and you won't be able to take losses.

As human beings, we think we understand statistics and probabilities. People understand that if you flip a coin 500 times, you will get approximately 50% heads As people, we tend to go over the past and feel that we could have traded better - This is not fair - Monday morning quarterbacking If you do think you can out trade a good timer service, then you have to also believe that you are one person in 10,000 There are a few, very few, people who know just which stock to buy and when to buy it. Perhaps you are that person.

In summary: Throw away those flawed methods. Take a small amount of your trading equity and follow a timing system that has a good history. It isn't easy to follow a market timer, but if you do it right, you will win...and over time, you can win very big.