There are many approaches investors use to time the market. However only valuation analysis has been proven to work in the long run. Were going to explore how and why valuation analysis is the best approach to time the market.

Time the Market Discussion

Momentum investors time the market based on technical indicators. Many will use charts, trends, moving averages, cycle theory, etc. to time the market.

I have no problem with using technical analysis in partnership with fundamental analysis. It makes sense to use every tool we have available to lower risk. However, technical analysis without fundamental analysis is just speculation, not sound investing.

The buy and hold strategy advocates claim you can’t time the market. They argue that many investors crash and burn trying to time the market (which is true!).

Although many of their arguments are valid, I contend that most are doing it incorrectly. Any good financial concept can produce poor results if done improperly.

Regular readers of the AAAMP Value Blog know I put an emphasis on the fact that price matters! Investment decisions should be made with valuation the primary factor. That is a form of market timing I call valuation analysis timing.