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Strategies & Market Trends : TIMING INDEX MUTUAL FUNDS

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To: ToTradeWell who wrote (69)2/7/2000 4:25:00 PM
From: donald sew   of 428
 
ToTradeWell,

>>>> I have been trading my retirement annuity - going from growth equity (tech stocks) to enhanced cash. I try to wait till record highs on Naz and then I get back in after it drops. (sometimes I have to wait) I guess this is what ya'll are doing here. Any helpful hints? <<<<

Thats a good stratey since you are only going long. But keep in mind that such is based on the belief that the NAZ/sector you are playing will continue up, as it is now. My question is, what happens if in the future the NAZ sells off and you buy again at the trough, but do not get out on the following rally since new highs are no longer set. In other words what would you do if on a rebound the market produces a LOWER HIGH. Would you stay in, since hypothetically a NEW HIGH has not been set.

Dont get me wrong, that strategy is good as long as the market continues up. Do you have a plan if the sector does not set a NEW HIGH? Eventually it will happen - when HECK if I know, but it could be soon, or in a year or 5 or 10 years but it will happen unless the BIZ CYCLE is changed dramatically. Keeping in mind that some believe that the BIZ CYCLE has its roots back in biblical times.

A LOWER HIGH could be a signal that the trend is changing, but also could be just an anomoly. But it is common that once the strong selling starts, it could be very quick and too fast to get out at a fair price.

seeya
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