Timing Models

Are you overlooking the most important ingredient to investing success?

MARKET TIMING MODELS

At the No-Load Fund Advisor we have two types of market timing models that we follow. The most conservative are NFA's Trend Following Models. The second type are our Predictive Models.

TREND FOLLOWING MODEL:

NFA's proprietary trend following models, purely mechanical, use technical analysis indicators to determine and signal market entries after an established up-trend has been measured and exits on the down trend.

Rule number one for growing a portfolio is to avoid markets that are trending down.  This model measures the internal strength and speed of the market.  It will buy near the lows or sell shortly after the top. By definition it must wait for the market trend to be established. This means the market must move off its low and increase in value and participation before a buy signal can be issued. By the same token, the market must peak and start to decline before a sell signal can be issued. The trend following models conservatively let the market tell us when to be in or out.

PREDICTIVE MODELS

NFA's Predictive models also use technical analysis further enhanced by market cycles and sophisticated time and price analysis to indicate when the market should change trend direction. This model is more subjective than mechanical.

We believe all markets have cyclical patterns that when tracked closely reveal themselves. We have identified specific cycles for the short (27-day), intermediate (9-weeks & 19-weeks) and long-term (39-weeks and above) movements of the market. Unfortunately, cycles can expand, contract, and invert, making it difficult to program a computer to recognize some of the delicacies the human eye can see. By monitoring these cycles and confirming expected market highs and lows with other technical analysis techniques, including price and time squaring, market highs and lows can be anticipated before major trend changes are apparent. By investing the portfolios, within their restrictive parameters, predictive signals often lower entry points and higher exit prices can be achieved. Predictive signals can and do increase portfolio returns but, along with these returns come some increase in risk and volatility.