2 Ways to Gain an Edge and Defy Fear

Focus: STRATEGIES

Effective market timers have a proven edge over time, writes Frank Kollar of FibTimer.com, and those who stick with their strategy while minimizing short-term losses are most likely to be profitable in the long term.

As a market timer, the one thing we must always remember is that the markets can, and most definitely will, throw every possible hardball, curveball, fastball, knuckleball, etc., at us.

The reason we invest in the stock market is because we recognize the huge potential for profits. But we are timing in a freely traded market that is subject to the emotional whims of traders. And when money is involved, those emotions can, at times, be extreme.

We became market timers because we have realized that not only is there no easy money, but also that the stock market will do all it can to relieve us of our money.

We are more than uncomfortable with the buy-and-hold approach to investing, and realize that although buy-and-hold may be fine if you are willing to wait 20-30 years, it can lead to huge losses over shorter time frames. The most current example was seen in 2008 when the S&P 500 and the Nasdaq Composite gave up 50%, resulting in huge losses.

The stock market is the ultimate big league, and there are traders who understand the psychological warfare you are facing and know how to use it to take your money.

Understanding those big league rules will put the winning odds back on your side.