What are some simple techniques used for Timing the Stock Market over the long term?
Buy low, sell high - the problem, of course, finding a crystal ball that will tell you when the highs and lows are going to happen :-) You could, for instance, save your money in cash and wait for the occasional sharp drop, but then you've lost profits & dividends from having that cash under the mattress all those years you were waiting. About the closest I've ever gotten to market timing, and I think the closest anyone can get in real life, is that I cut personal spending to the bone from 2008 to 2011, and invested every spare cent.  But such opportunities only come along a few times in a lifetime. The other thing is to avoid what a lot of people do, which you might call anti-timing.  When the market is high, they jump on the bandwagon, then when it drops they panic-sell, and lose money. I can think of a few simple and quick techniques for timing the market over the long term, and they can be used individually or in combination with each other. There are also some additional techniques to give early warning of possible turns in the market. The first is using a Moving Average (MA) as an indication of when to sell. Simply if the price closes below the MA it is time to sell. Obviously if the period you are looking at is long term you would probably use a weekly or even monthly chart and use a relatively large period MA such as a 50 week or 100 week moving average. The longer the period the more the MA will lag behind the price but the less false signals and whipsawing there will be. As we are looking long term (5 years +) I would use a weekly chart with a 100 week Exponential MA. The second technique is using a Rate Of Change (ROC) Indicator, which is a momentum indicator. The idea for timing the markets in the long term is to buy when the indicator crosses above the zero line and sell when it crosses below the zero line. For long term investing I would use a 13 week EMA of the 52 week ROC (the EMA smooths out the ROC indicator to reduce the chance of false signals). The beauty of these two indicators is they can be used effectively together. Below are examples of using these two indicators in combination on the S&P500 and the Australian S&P ASX200 over the past 20 years.  S&P500 1995 to 2015  ASX200 1995 to 2015 If I was investing in an ETF tracking one of these indexes I would use these two indicators together by using the MA as an early warning system and maybe tighten any stop losses I have so that if the market takes a sudden turn downward the majority of my profits would be protected. I would then use the ROC Indicator to sell out completely out of the ETF when it crosses below zero or to buy back in when the ROC moves back above zero. As you can see in both charts the two indicators would have kept you out of the market during the worst of the downfalls in 2000 and 2008 for the S&P500 and 2008 for the ASX200. If there is a false signal that gets you out of the market you can quite easily get back in if the indicator goes back above zero. Using these indicators you would have gotten into the market 3 times and out of it twice for the S&P500 over a 20 year period. For the ASX200 you would have gone in 6 times and out 5 times, also over a 20 year period. For individual shares I would use the ROC indicator over the main index the shares belong to, to give an indication of when to be buying individual stocks and when to tighten stop losses and stay on the sidelines. My philosophy is to buy rising stocks in a rising market and sell falling stocks in a falling market. So if the ROC indicator is above zero I would be looking to buy fundamentally healthy stocks that are up-trending and place a 20% trailing stop loss on them. If I get stopped out of one stock then I would look to replace it with another as long as the ROC is still above zero. If the ROC indicator crosses below zero I would tighten my trailing stop losses to 5% and not buy any new stocks once I get stopped out. Some additional indicators I would use for individual stock would be trend lines and using the MACD as a momentum indicator. These two indicators can give you further early warning that the stock may be about to reverse from its current trend, so you can tighten your stop loss even if the ROC is still above zero. Here is an example chart to explain:  GEM.AX 3 Year Weekly Chart Basically if the price closes below the trend line it may be time to close out the position or at the very least tighten up your trailing stop loss to 5%. If the price breaks below an established uptrend line it may well be the end of the uptrend. The definition of an uptrend is higher highs and higher lows. As GEM has broken below the uptrend line and has maid a lower low, all that is needed to confirm the uptrend is over is a lower high. But months before the price broke below the uptrend line, the MACD momentum indicator was showing bearish divergence between it and the price. In early September 2014 the price made a higher high but the MACD made a lower high. This is called a bearish divergence and is an early warning signal that the momentum in the uptrend is weakening and the trend could be reversing soon. Notice I said could and not would. In this situation I would reduce my trailing stop to 10% and keep a watchful eye on this stock over the coming months. There are many other indicators that could be used as signals or as early warnings, but I thought I would talk about some of my favourites and ones I use on a daily and weekly basis. If you were to employ any of these techniques into your investing or trading it may take a little while to learn about them properly and to implement them into your trading plan, but once you have done that you would only need to spend 1 to 2 hours per week managing your portfolio if trading long-term or about 1 hour per nigh (after market close) if trading more medium term.
In the short term the market is a popularity contest In the short run which in value investing time can extend even to many years, an equity is subject to the vicissitudes of the whims by every scale of panic and elation. This can be seen by examining the daily chart of any large cap equity in the US.  Even such large holdings can be affected by any set of fear and greed in the market and in the subset of traders trading the equity. Quantitatively, this statement means that equities experience high variance in the short rurn. in the long term [the stock market] is a weighing machine In the long run which in value investing time can extend to even multiple decades, an equity is more or less subject only to the variance of the underlying value. This can be seen by examining the annual chart of even the smallest cap equities over decades.  An equity over such time periods is almost exclusively affected by its changes in value. Quantitatively, this statement means that equities experience low variance in the long run. "As JoeTaxpayer notes in his comment, ""answers"" to this are really just opinions, so here's mine, for what it's worth. If your risk tolerance is 5 out of 5, you shouldn't have anything in Treasuries.  Those are basically the most conservative of all investments.  This would probably mean no TIPS as well.  If you're more like 4.5 out of 5, you could have some, but just a little; a 30% allocation to government securities is quite conservative.  If you want to diversify across different asset classes, you could consider a bond fund like (for instance VBMFX, the Vanguard total bond market index fund).  Your portfolio doesn't currently contain any (non-government) bonds, which is something to consider. 20% seems like quite a large allocation to REITs.  Most sample portfolios I've seen allocate no more than 10% to REITs, often no more than 5%.  There are some that have more like the 20% you're envisioning, but you might want to ponder that a bit more especially in light of your concerns about REITs being at an all-time high. As for your question about all-time highs, it's reasonable to think about, but I think waiting for 30-50% off all-time highs is unrealistic.  Looking at a chart of VFINX (essentially the S&P 500), I see that at the nadir of the recent downturn, in early 2009, the market was at about 50% of its pre-crash all-time high.  At the nadir of the dot-com bust, the market was about 45% off its pre-crash high.  If you're waiting for it to be 50% off it's all-time high, you're not just waiting for ""a good time to invest"", you're waiting for a major crash. It could certainly make sense not to immediately put everything into US stocks, but that doesn't mean you should put nothing in.  As Trevor Wilson commented, you could put some of the money in and then gradually add the rest over time, reducing the risk of unluckily buying at the peak.  (This can also reduce the psychological angst of worrying about whether you're doing the right thing, which is worth taking into account.)  Also note that if you get rid of the treasuries, you eliminate a good chunk of the stuff that you thought was too close to the peak anyway. Your two basic points (asset allocation and low-cost funds) have a strong Boglehead flavor.  You may already have looked at the Bogleheads wiki; if not you should take a look.  If you are comfortable with that philosophy (and I think it's a sound one), you should remember that part of that philosophy is not worrying about ""timing the market"".  You pursue a buy-and-hold strategy if you believe the market will go up in the long term and don't care much about what it does in the short term.  That said, as mentioned above, you might want to ease in your investment over time, rather than buying all at once, if only to avoid tearing your hair out if the market goes down in the short term. Incidentally, your proposed portfolio is similar to this one that they mention, although as I said above I think this is too conservative if you are 30 years old and consider yourself a ""5 out of 5"" in terms of risk tolerance.  I'm not sure if you already saw that in your research, but since that portfolio apparently has a name and is known, you might be able to find information about its risks and benefits by searching for discussion of it by name." Speaking from stock market point of view, superficially, TA is similarly applicable to day trading, short term, medium term and long term. You may use different indicators in FX compared to the stock market, but I would expect they are largely the same types of things - direction indicators, momentum indicators, spread indicators, divergence indicators. The key thing with TA or even when trading anything, is that when you have developed a system, that you back test it, to prove that it will work in bear, bull and stagnant markets. I have simple systems that are fine in strong bull markets but really poor in stagnant markets. Also have a trading plan. Know when you are going to exit and enter your trades, what criteria and what position size. Understand how much you are risking on each trade and actively manage your risk. I urge caution over your statement ... one weakened by parting the political union but ought to bounce back ... We (my UK based IT business) have already lost two potential clients due to Brexit. These companies are in FinServ and have no idea of what is going to happen, so I would respectfully suggest that you may have less knowledge than professionals, who deal in currency and property ... but one premise of TA is that you let the chart tell you what is happening. In any case trade well, and with a plan! It wouldn't surprise me to see a country's return to show Inflation + 2-4%, on average. The members of this board are from all over the world, but those in a low inflation country, as the US,Canada, and Australia are right now, would be used to a long term return of 8-10%, with sub 2% inflation.  In your case, the 20% return is looking backwards, hindsight, and not a guarantee. Your country's 10 year bonds are just under 10%. The difference between the 10% gov bond and the 20% market return reflects the difference between a 'guaranteed' return vs a risky one.  Stocks and homes have different return profiles over the decades. A home tends to cost what some hour's pay per month can afford to finance.  (To explain - In the US, the median home cost will center around what the median earner can finance with about a week's pay per month. This is my own observation, and it tends to be correct in the long term. When median homes are too high or low compared to this, they must tend back toward equilibrium.)  Your home will grow in value according to my thesis, but an investment home has both value that can rise or fall, as well as the monthly rent. This provides total return as a stock had growth and dividends.  Regardless of country, I can't predict the future, only point out a potential flaw in your plan. "Remind yourself that markets recover, usually within a few years. If you believe this and can remind yourself of this, you will be able to see the down cycles of the market as an opportunity to buy stock ""on sale"". No one knows the future, so many people have found investing on a regular schedule to be helpful. By putting in the same amount of money each period, you will end up buying fewer shares when the market is up, and more when it is down. As long as your time horizon is appropriate, you should be able to wait out the ups and downs. Stocks are volatile by their very nature, so if you find that you are very concerned by this, you might want to consider whether you should adjust the amount of risk in your investments, since over time, most people lose money by trying to ""time"" the market. However, if your investment goals and requirements haven't changed, there likely isn't any need to change the types of assets you are investing in, as what you are choosing to invest in should depend on your personal situation. Edit: I am assuming you want to be a long-term investor and owner, making money by owning a portion of companies' profits, and not by trading stocks and/or speculation." If your gut told you to buy during the depths of '09, your gut might be well-calibrated. The problem is stock market declines during recessions are frequently not that large relative to the average long run return of 9%:  A better strategy might be hold a percentage in equities based upon a probability distribution of historical returns.  This becomes problematic because of changes in the definition of earnings and the recent inflation stability which has encouraged high valuations:  Cash flow has not been as corrupted as earnings now, and might be a better indicator:  This obviously isn't perfect either, but returns can be improved. Since there is no formulaic way yet conventionally available, the optimal primary strategy is still buy & hold which has made the most successful investor frequently one of the richest people on the planet for decades, but this could still be used as an auxiliary for cash management reserves during recessions once retired. "LOL. Its gotten harder for those who dont want to change with the times. Tools like sentdex and PsychSignal provide a solid argument against the headline of the article. Its not harder, the methods have just changed. Most people dont understand the methods and thus: ""its gotten harder.""  Harder is entirely relative, for people like me, its gotten easier...  [This algorithm looks for a high volume of bullish tweets about penny stocks and returns 95% in a year.](https://www.quantopian.com/posts/psychsignal-machine-learning-and-penny-stocks-95-percent-in-a-year)    [This algorithm trades my favorite tech stocks using tweets to determine when to buy. 140% 2016-mid 2017.](https://www.quantopian.com/posts/psychsignal-machine-learning-models-and-tech-stocks)   I will say that in those algorithms, I throw out more than half the data. To be more correct, I assume half the data is bullshit (people mindlessly reposting, morons talking about shit they dont understand, etc.)   People, in general, are idiots. The moment you accept this, social media analysis becomes rather easy.   In my first 3 weeks of trading ever I was up 60% because of Bio Med stocks (i lost it all due to greed, I now always pull out early (lol) as opposed to too late). I didn't know ANYTHING about the bio med market - I let stock twits do all the work (in general, Twitter is actually more correct than stocktwits, which is rather ironic). Once I started trading with algorithms, I automated this process.  Have real analysts been squashed by the short segments they get on TV? sure. but if you are really getting your info from TV, as opposed to just reading it in 1/10th of the time it takes to watch a TV program, thats your fault. These days I feel its best to do the research yourself, read about it online somewhere, or use the high volume of data available with algorithmic trading." The study of technical analysis is generally used (sometimes successfully) to time the markets. There are many aspects to technical analysis, but the simplest form is to look for uptrends and downtrends in the charts. Generally higher highs and higher lows is considered an uptrend.  And lower lows and lower highs is considered a downtrend.  A trend follower would go with the trend, for example see a dip to the trend-line and buy on the rebound. Whilst a bottom fisher would wait until a break in the downtrend line and buy after confirmation of a higher high (as this could be the start of a new uptrend). There are many more strategies dealing with the study of technical analysis, and if you are interested you would need to find and learn about ones that suit your investment styles and your appetite for risk.