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