Objective of the Mid Term timing model

To produce absolute returns from straightforward switching between long and short positions in index based mutual funds and exchange traded funds.

Investment objects

The mid term timing method is suited for investments in mutual funds (e.g. from Rydex and ProFunds), exchange traded funds (QQQQ, SPY, IWM, etc.) and other index funds or equity long / short investment vehicles.

The model alternates between ‘long’ and ‘short’ positions. 

For investors who either have no opportunity or do not want to engage in exploitation of opportunities in falling markets, the model will also work well as a long only system with funds invested in cash or money market when the model signals 'Short'.

How frequent does the model trade?

During established trends the system may remain in the same position for months.  In volatile periods changes will occur more often.  In total 70 trades were recorded for the 58 months period 8/2000 – 6/2005 (see graph).

Model performance

Signals have been published only since mid October 2003.  Results have been variable.  However, after continuous effort to improve the base model, a breakthrough was made late June 2005.  One important element was the inclusion of market volatility indices (VXN, VIX) for signal calibration and elimination of some earlier misinterpretations.  The outcome of this work, which should show in future posted trades, seems to be

-   a more stable model with fewer trades than previous model versions

-   improved results

Being well aware that back test is back test, and that real trading is quite another game, expectations are still that this model based on hard earned experience with market timing approaches and models since August 2000 (see “About the model) shall perform . 

About index fund investing

The internet provides numerous writeups on index investing, and sometimes it seems to be presented as a more complicated affair than necessary.  We do not see any mission in repeating such material on these pages, as a simple search should provide sufficient basis for those who want to study the subject in more detail.

The aim is to represent a simple, straightforward approach which can be applied in most investment accounts without the need to design or employ complex strategies.  Basically it is a matter of taking part in the general market moves without having to involve in selection of individual stocks or particular sectors. 

Our attitude is that what really matters in the long run is a decent strategy for being invested in major market upturns and staying out (or short) during major downturns, the key being to identify reasonably good points for turning around the the positions in our account and - most important - to act consistently upon them, and then let the chosen tool or fund family do the job. 

Nasdaq: +2172%

S&P 500: +415%

Back test Aug 2000 - Sep 2003, published signals since Oct 2003.

Long and money market only

Investors who prefer ‘long’ investment objects only, can make use of the Long signals from this model and remain in cash or money market funds when the signals are either Short or Cash.  Use the TimerTrac graph options to see Long Only performance for the Mid term model.

Rydex Velocity Venture with mid term timing