The Case For Market Timing Diversification

Definition: “Diversification” – a portfolio strategy designed to reduce exposure to risk by combining a variety of investments which are unlikely to all move in the same direction.

Many Market Timers Pay Little Attention

As we have written before, “market timing is the following of a long term strategy to profit from the financial markets, that also protects us from the inevitable down trends that occur.”

Many investors who understand the potential of market timing, pay little attention to the potential of diversification. Many jump right into an aggressive timing strategy with little thought about how they will handle a period of losing buy and sell signals.

But there is a way to jump right in, and also realize the long term potential of even the most aggressive strategies. It does require a bit more work, but not all that much. Just a few minutes a day to check for changes and make adjustments.

Aggressive Market Timers Can Benefit

Many market timers already follow well defined investment plans that include diversification. But as we just discussed above, some do not.

If you are one of those who do not… consider changing. Diversification is not only for those who are afraid of volatility. It has an important place in even the most aggressive of portfolios.

We have been market timing since the early 1980s and although we are quite aggressive, we diversify our timing funds, not just for safety, but also to “enhance” our profit potential.

Those who follow our Aggressive Bull