A simple long-term market timing system would have saved me a lot of money when I invested a large part of my savings into different mutual funds during March 2000. Two months later in May, such a system would have given me clear indicators to sell my investments at that moment. I would have saved 40% of my savings.

Now I know better and since you are reading this, you can know now better as well. In this blog post I want to show you that it is not just me who says that long-term market timing can gain and save you a lot of money. Below you see a good 8-minute video (not from me) that explains very clearly the concept of long term marketing and how it works.

This Video explains a simple Market Timing System for the S&P 500

The video is from April 2008 but the content is timeless. The market timing system presented in the video is based on the 20 and 50 weekly moving averages. The video deals specifically with the S&P 500.

    Simple market timing systems are availble to outperform the stock market.

The idea of the system presented in the video is to buy when the 20 week moving average exceeds the 50 week moving average with more than 1%. The sell signal comes when the 20 week moving average dives under the 50 week moving average with more than 1%.

Comparing these 2 moving averages, the system indicates when the long term trend in the market price has started to go up or down. The 1% rule is there to avoid too many false buy or sell signals. As we all know, history does not guarantee future performance.

The 1% rule might for example not be good enough in the future to avoid false signals when volatility in the market price increases.

Note that we are not using the system presented in the video ourselves. We use a system that has a similar purpose and is better tested on not just the S&P 500 but also on other US and non-US market indices.

Sell at 12,266 Points and Buy Back at 8,500

Stock Trend Investing is just as simple for the user but more advanced in the analysis than the approach presented in this video. The similarity is that both methods recognize the long-term trends in the market. They provide buy/sell indicators when these trends are going up or down. Note that when we talk about long-term trends we talk in terms of many months or even years.

These buy/sell indicators would inform you for example to sell your Dow Jones index Funds after the February 2008 closing when the Dow was 12,266 points. And they tell you to buy the same fund back after May 2009 when the Dow was 8,500 or 31% lower. You could have put this 31% in your pocket.

Proven Systems to Outperform the Market are Available

Thus there are various simple long-term market timing systems out there that can help you and other long-term investors to outperform the stock market and make good returns even when you can spend only one hour per month on your investments.

Now you know.

If you are interested to know more about long-term market timing, you can start today with a no-risk trial for our proven system.