Market Media Matrix

The December 19, 2005 edition of Newsweek, an article by Jane Bryant Quinn titled "Investing Goes Back to Basics" includes the following text: “All-in-one funds are also the cure for people who think they can "time" the market by buying stocks when they start to rise and switching to cash before they fall. A new study by the University Of Michigan School Of Business, funded by Towneley Capital Management, throws a wet towel on those dreams.”

Now you have to stop and think about who is funding this study, a capital management company. In case you don’t know this either, the University of Michigan issues a report about consumer confidence on Friday mornings. What you may not know is that the University of Michigan sells the results of this report on Thursday to companies for advance release. When the report is released on Friday mornings, those with advance knowledge have already traded on the information through the futures market. The Market Media Matrix strikes again.

Getting back to the report of market timing versus long term “buy, hold, and hope strategy,” the article written by Jane Bryant Quinn’s says, “If you invested $1 in the market in 1963 and held through 2004, it would have grown to $75, with dividends reinvested“. Wow, I bet you just can’t wait for each dollar you have invested to “grow” to $75 in only 42 years!

The previous statement is called “the bait”, in the bait and switch selling technique. Here comes the switch. “But markets move in spurts. If you happened to miss the 90 best-performing days out of that 42-year span, you'd have earned only $2.70.” Not only is this the switch, but they have include a dire warning that if you try market timing, you will end up broke! My interest was peaked when I saw the 90 best performing days mentioned in the article. So, what this article is saying, you only needed to invest money for 90 days to make your money grow, the other (365 days X 42 years= 15,330) -90 days= 15240 days) 15240 days your money is just sitting there doing nothing.

The true purpose of this study is based in the next statement. “However, if you guessed right to avoid the worst 90 days, you'd have turned $1 into $1,694.” Are you scratching your head now? I guess my mind just works different than most people, because I try to see things logically, so this is what I am thinking.

Choices A, buy, hold, hope for 42 years for 90 good days in the market, results $75.
Choice B, time the market yourself and miss the best 90 performing days, results $2.70
Choice C, use market timing to avoid the worst performing 90 days of the market, results $1694.

Given the choices of A, B, or C, everyone would want choice C. So how does one go about learning how to time the market? The Harmonic Stock Clock uses simple rules to help you do your own market timing for your own stocks. How does the Harmonic Stock Clock help you do this? Look at the sample charts below, you will see the ideal time to buy a stock and the best time to avoid market tops.


Click here if you would like more information concerning the Harmonic Stock Clock


God Bless

Doc