Monday, April 11, 2011

Market Timing that Works?? End of Month Strategy

end of month strengthHere's a good one that looks at the end of month market timing strategy.

It's something I mention every month and in the podcasts (Audioboos). The end of the month (and first few days of the following month) sees the 401(k) dollar cost averaging into mutual funds. Four times a year, the month-end is also quarter-end, and portfolio managers tend to (I think) want to be in the winning stocks, and prop them up even further.

But wait... This hasn't been working the past 10-years! Oops! So, is this another system that's broken? Seems so!

What I've noticed is that the "hard dates" don't work for long in any timing system. Just like the best 6 months of the year strategy. There is always a need for a subjective review of the market near the dates of buying and selling. And there's always a need to realize that maybe it won't work, and maybe it doesn't work, anymore.

blog comments powered by Disqus