| While aggressive timing strategies can achieve large | | | | either direction) than anyone expects. During a strong |
| profits over time, not every trader is emotionally able | | | | bull run, it is common to find individual sectors that |
| to handle them.The good news is, you don't have to | | | | double the gains of the overall market.Winning The |
| be an aggressive market timer to achieve large profits. | | | | BattleThe FibTimer Sector Timer strategy covers 16 |
| Trading sector funds with a solid timing strategy is not | | | | industry specific sector funds found in the Rydex Fund |
| only profitable, but drawdowns are usually very small | | | | Family. Several other widely used fund families also |
| because sector timing strategies are very | | | | have sector funds, including Pro Funds and Fidelity |
| diversified.Trading the sectors deserves your | | | | Funds which can be used with our sector timing |
| consideration.Trading The SectorsLately is seems like | | | | signals.Even in volatile market conditions during which |
| the financial markets are being pushed in different | | | | the overall stock market is performs poorly, the |
| directions almost daily. How does a mutual fund | | | | FibTimer Sector Timer has performed exceptionally |
| market timer take advantage of such volatility, while | | | | well.Sector timing is proactive money management at |
| protecting himself or herself from the very real risks | | | | its best. Constantly putting your money in the strongest |
| such volatility creates, as well as from the potential | | | | sectors while removing it from the weakest |
| drawdowns that can occur during such times?The | | | | sectors.This is where the diversity inherent in sector |
| answer is by trading specific industry sector funds. | | | | timing stands out. Top performing sectors are where |
| Here is a "quick" list of reasons why:1. Diversification: | | | | your timing funds are allocated, and no one sector can |
| By having small positions in multiple industries, you | | | | cause irretrievable damage to the portfolio should that |
| reduce exposure to any single industry being affected | | | | industry collapse without warning.ConclusionOver the |
| by a negative news event.2. Volatility: While individual | | | | years, sector fund timing may go down as one of the |
| sectors are no less volatile than the rest of the market, | | | | best strategies ever created. Its ability to move funds |
| they do not move together. So the volatility to one's | | | | into only those industry sectors which are performing |
| portfolio is considerably reduced.3. Drawdowns: | | | | well keeps it profitable in most market conditions.The |
| Because sector funds go to cash during sell signals, | | | | low drawdowns, low volatility and diversification |
| and because there are always some funds in bull | | | | inherent in sector timing, not to mention strong |
| markets at the same time there are others in bear | | | | profitability, cause this strategy to stand out from all the |
| markets (during which those sectors are protected in | | | | others.In volatile market conditions sector timing can |
| money market funds), drawdowns are kept to | | | | create profits when other traders are lucky just to be |
| extreme minimums.4. Good in All Markets: There are | | | | holding onto their capital, while drawdowns, if they |
| always single industries in their own bull markets. Even | | | | occur at all, become almost a non-event.While sector |
| during a cyclical bear market, such as we experienced | | | | timing may not make huge gains during cyclical bear |
| during 2000-2002, there were always some industries | | | | markets, being mostly in cash, the strategy will protect |
| moving higher. And if not, you are still protected by | | | | your investment capital. And it will then outperform |
| being in money market funds.5. Active Timing: Though | | | | during bull markets, always keeping you invested in |
| sector timing is not aggressive, it is certainly active. | | | | those industries that are in their own bull |
| You will always be trading the bullish sectors, and | | | | markets.Caveat.. sector timing does require active |
| exiting the under performing ones. In some respects, it | | | | participation. Its potential is excellent, there are no short |
| is the equivalent of running your own well managed | | | | (bearish) trades, and it only requires a couple of |
| mutual fund.6. Trends: Industry sectors tend to trend. | | | | minutes a day to check for and make changes if they |
| And when they trend, they often move further (in | | | | are needed. |