| Show BUSINESS The Salt Lake Tribune 1 Sunday February 1:9 2004 Market timing isn't for evelyone is the ug:y truth about timing Often you must sell at a loss depending on when the "sell signal" to get out of stocks comes in On the next "buy signal" you may end up getting back in the market at a higher price Most of your trades may lose money In periods of rising stock prices a investor is almost sure to do better There are no guarantees that whatever timing method 4041 you use will con- tinue to work HUMBE even if it has in when they "can't stand it any- This r to et Ion and )IE" ick more" While I favor a strategy I find Merriman's comments worth listening to And I fmd them most credible because Merriman manages both buyand-hold and market-timinmutual fund port- folios for clients based on their ob- jectives and tern- perament "It is not my goal to turn a buy- r into a timer" he said For holders he recom- mends as I do IF till with my OWn ' 0 CRUZ money adding enough fixedS GAME income investments to the portfolio to temper volatility and risk of loss Merriman is also the only market timer I know who posts buy and sell signals as they occur for free at his Web site d -L- A and-holde- buy-and- "Ik the ' THE SAli past "Market timing is one of the most difficult strategies to have the discipline to follow" said Paul Merriman an investment adviser in Seattle "There is a gnawing thought that 'when I get in the market will go down and when I get out the market will go up'" You would think Merriman Is your quintessential adviser who insists market timing is a loser's game And you would be wrong "Market timing allows investors to have a greater exposure to stocks by having a delmed exit strategy" said Merriman who uses market timing for his own money By contrast many purported follow what Merriman calls the "CSIA" exit strategy: They watch in dismay as their portfolio plummets in a bear market until they give in and sell at or near the bottom http:wwwfundadvicecom while also disclosing the four timing systems on which they are based (For most client accounts Merriman uses more specific proprietary timing systems applied to individual d I NUMMI ' 'N i r IV -0- ("°'"N -1 a) !-:- - ' V -- 71'-'d t (' 4k''' "Most people have an inherent distrust of mysterious systems and they should" said Dennis Tilley director of research at Merriman's firm The four timing systems shared on the Web site are a moving average for the Standard & Poor's 500 Index an interest rate model based on commercial paper yields a Nasdaq daily up and down volume TOP PRODUCERS IN i car-craz- y Undercover agents of sorts for Ford Motor Co listen intently and note reactions as they mingle among showgoers surrounding production models like the Mustang and concept vehicles like the Ford Bronco : Ford design chiefJ Mays calls them the "spy trust" — and they Will do the same at competitors' d isplays "We like to think of the auto show as providing a mental litmus test to gauge public reaction" Mays said "The company learns a lot and the information pecomes an incredible bargaining tool for design to try to push vehicles through" Korean automaker Kin Motors Corp wants to know how showgoers are reacting to its KCV III concept convertible sports car "We're very interested in finding out whether its retract TI-I- r ) 1 :- -- Lwow ad bowls Strytor $10000 Minimum FDIC Insured CD - 1 - ' w Trust - ' - t t- :11 4 1 gio o' - !i ' - t-- 1 litteitt i fi" I A811(-114-11- ' 4 1 0"' t '" Org'''' " lttz i 91 li sw b 4— cp:' ' i a t li I s) : 4 ''" ''S 44 1: 11111 4( 1‘- I ti(4 (041114-- Saratoga Hills pennanent Interest Rate Acquisition Bridge Loan I year The Cord Cottocwood Creek the Meadows Assisted care facilities $31000000 6 k-- ' i rib A t:i ' i" 9 li f q1- - 414E1 - 1 ' ' "- 4 tj 4 '0Alt I g" 44N 1 ri 14 Al'? 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s 60til 1 FULL SERVICE ALL HOURS ""mtt t14 I ' 111 1500 Chicago N 10kUt" ' 11 J 0 ' k 'ti 1e-- Humberto Ow: can be reached al 4 sk Hunt herto (toot corn or cio 7)1 butte led la Serlie rices 435 N Mich na n Ave BUSINESS TELEPHONE SYSTEMS ame M0101 emotions" Lawrence Czelusta a San Antonio podiatrist and editor of the market-beatinIndexl?x timing newsletter (information and performance record at http: wwwindexrccom) makes the same point "We know we are azevt Ivo 114:4(4 tory" trend-followin- 41101111 VI president of Cash Management Resources in Monroe NY and author of the new book All About Market Timing (The McGraw Hill Companies 2003) "Market timing is not a forecasting tool" Masonson emphasized "We are just trying to say now is or is not a good time to be in the market based on his- e one-tim- unable to predict what the market is going to do so we just follow patterns" he said And just like Merriman and Ntasonson advocate "we have a mechanical plan that takes all the emotion out if it" and triggers buy and sell signals based on I rend following indicators "Anybody who follows a plan" Czelusta said "will (I() better than if they just go by the yhints of their risk" said Leslie Masonson through last Dec 31 the average compounded return of the Standard & Poor's 500 stock index was 114 percent a year and the loss was 474 perworst cent using timing the return Increased slightly to 12 percent a year and the biggest loss was Just 145 percent To me that would be the biggest attraction of a disciplined timing system: cutting short losses during bear markets that on average have pushed stock prices down 30 percent every three to four years "It's all about protecting one's principal and reducing model and a New York Stock Exchange daily advance-declin- e model There is enough detail on the Web site for investors to track these systems on their own if they choose The idea is not to predict what stocks will do next most timers concede that's not possible but to identify factors that have coincided with up and down trends in the past Now for the bottom line: The timing systems Merriman shares at his Web site have achieved their goal of matching — in fact exceeding — market returns with less risk For example from Jan 1 1972 - Nvtl--1- 4- i 0 irtt (t 1-4- 1 4 -- fo I iityll I — 11 f'11614111 74)r5715 1 t fanorce 278 4414 ite 4 ktALIuk |
