I say that's baloney. But this is completely different from what we do, moving much or all of your money in and out of the market. Most mutual fund managers remain committed to the type of asset they own regardless of their view of the market. In many cases, they carefully accumulate a stock over several months to avoid driving up the price. They are not likely to ditch that stock for timing purposes.
Fund managers see a market decline as an opportunity to buy more of the stocks they like.
Market timers see a market decline and conclude they should sell their portfolios in the hope that they can avoid major losses and reposition themselves in the market at lower prices. Applying the four systems we use for timing the U.S. stock market to the Lipper Growth Fund Index, backtested to 1972, produced losing trades about one-third of the time. The average loss was -2.8 percent and the average gain was 16.6 percent. Another example is our record with United Services Gold Shares, a fund we have been timing since 1983. Six of every 10 moves we have made in that fund have been losing trades, yet our cumulative record is splendid.