1. (Insert Company Name Here)
Market Timing
(Insert Company Name Here)
Securities offered through LPL Financial. Member FINRA/SIPC

2. Alan Greenspan

3. “If the facts change, I will change.” - Alan Greenspan
If the facts change, I will change. Alan Greenspan knew as things in the market changed, you couldn’t continue doing the same thing and get the same results. He takes an adaptive approach and realizes one must able to change in order to adapt to the new market environment.

4. Myths and Facts
It’s amazing how often people make decisions on something they overhear without knowing the facts.

5. Myth #1: You Can’t Time the Market
Who started this rumor?
Investment Companies and Money Managers.
Why would they do this?
So you will pay them.
What do they do?
Make buy and sell decisions…and every buy or sell decision is timing the market!
Myth: You can’t time the market. This was started by investment companies and money managers so that they could receive a fee for managing your money. But wait, they actually make decisions when to buy and sell stocks inside the mutual fund. Do they just do it whenever they feel like it’s time? No, they too try to time their purchases the best they can.

6. The Fact…
Most people believe “timing the market” means buying perfectly at the bottom and selling perfectly at the top.
In reality it’s all about lowering risk by scaling in or out of trending markets and lowering portfolio volatility!
TIMING IS NOT ABOUT GETTING IT PERFECTLY RIGHT ALL THE TIME. IT’S ABOUT GETTING IT “MOSTLY RIGHT MOST OF THE TIME!”
No one has a crystal ball that predicts the future. But most people believe that timing the market refers to buy at the lowest point and sell at the highest as the stock price moves. While we want to target that, we are realist and know that won’t happen every time. But we can strive to get it right as often as possible.

7. Myth #2: If I miss only a handful of positive days in the market my investment returns will plummet.
Why does this myth exist?
to keep you invested in buy-and-hold strategies
The evidence sited…..
The Bull Market from Jan 1984 through Dec 1998 S&P buy-and-hold return was 17.89% annually.
Over this period, only a handful of trading days accounted for most of the market’s movement.
(read slide) One doesn’t have to catch every positive day in the market to still capture a good return.

8. What you’ve probably heard before…
If you missed the best days in the market, your average return dropped from 17.89% to….
# Of Trading Days Missed
Best
10 Days
14.24%
20 Days
11.99%
30 Days
10.01%
40 Days
8.23%
In fact, you could miss some of the best days and still walk away with a good return!
Source: Financial Planning Association Journal, May 2005: ‘Missing the Ten Best’ by Paul J. Gire, CFP®

9. What you’ve probably NOT heard before…
Missing the worst days would have made a bigger impact:
# Of Trading Days Missed
Best
Worst
10 Days
14.24%
24.17%
20 Days
11.99%
27.04%
30 Days
10.01%
29.45%
40 Days
8.23%
31.66%
What about the flip side. What if you missed some of the worst days in the market? During this time frame, it would have served better to miss the big down days.
Source: Financial Planning Association Journal, May 2005: ‘Missing the Ten Best’ by Paul J. Gire, CFP®

10. # Of Trading Days Missed
Missing the best and worst days beat the market buy-and-hold 17.89% average annual return:
# Of Trading Days Missed
Best
Worst
Both
10 Days
14.24%
24.17%
20.31%
20 Days
11.99%
24.04%
20.68%
30 Days
10.01%
29.45%
20.80%
40 Days
8.23%
31.66%
20.87%
Now, what if you put them both together. For this time period (remember this was a bull market) if one missed the worst days and the best days, they would have came out better than just catching the up days. This shows how important it is to manage downside risk.
Source: Financial Planning Association Journal, May 2005: ‘Missing the Ten Best’ by Paul J. Gire, CFP®

11. RISK MANAGEMENT MATTERS!
Fact
Investment returns can be enhanced by
lower volatility and overall trend capture.
RISK MANAGEMENT MATTERS!
The fact is, one cannot neglect risk management.

12. Historical Trends: Secular Bear
This chart, from RYDEX, illustrates the history of secular bull and bear markets. The green represents secular bull markets and the red represents secular bear markets. Within the secular trends are the shorter cyclical bull and bear trends. As you can see on the graph, the secular markets can last for an extremely long period of time. From a historical perspective we remain within a longer secular bear market. If we look back to the last time this happened, from , you can see that the market was essentially flat. During that period, our country faced recessions, Watergate, Vietnam, The Arab Oil Embargo, an energy crisis, high unemployment, and high interest rates.

13. Secular Bear Market Opportunities
This chart from dshort.com helps illustrate the concept of trend following. This represents a 10 month simple moving average. Each dot represents the closing price of the S&P 500 at the close of the month. The blue line is the 10 month moving average. When the market closes above the trend line, the market is technically in an up-trend. When the market closes below the trend line, the market is technically in a down-trend. The down side to this process is that it sometimes gives investors false signals, or whipsaws. In these events, we sometimes have to get out of the market and then get right back in a month later, at a higher price. This is the price a trend follower is willing to pay to avoid the large drawdown's that were experienced during and November 2007-June As you can see, there is no emotion in the process.

14. Investing involves risk including loss of principal.
No strategy can guarantee profit or protect against a loss. Past performance is not indicative of future results.
Investing involves risk including loss of principal.