Every broker and financial planner will tell you that you cannot time the stock market. I saw John Bogle, the great seer of Vanguard, on CNBC saying it cant be done. Of course, it is easy to understand why he and every other mutual fund manager would say that as they would have a problem managing huge inflows and outflows of money and he was buying and holding during the 18-year bull from 1982 to 2000.

Every successful hedge fund managers knows that Buy and Hold is death for capital investment. Hedge fund managers are different than regular mutual fund managers in that they only get paid when they make a profit for their investors. Wouldnt it be refreshing if we could have that happen for the mutual funds you own. Last year 90% of all stock mutual funds lost money and the average fund manager made about $300,000.

To be invested in a hedge fund you must be a qualified investor. That means you need to show an income of $200,000 a year for the last 2 years and have a net worth of $1,000,000. It is the old story of the rich get richer. The reason is simple. They dont put money with money mangers who cant manage money. Hedge fund managers must make profits or starve. The Securities and Exchange Commission should allow this type of investment for small investors, but they dont. Why dont you write them a letter and ask why?

To protect your cash in your IRA, 401K, SEP, trust or just plain stock account you can learn to use market timing. There is one very simple timing method that anyone can master and you dont have to be a mathematical genius or even the least bit market savvy to do it.

From 1950 to the year 2000 the Dow Jones Industrial Average gained 10,534 points. That is a pretty long time period so it is a very good sample. According to the Stock Traders Almanac (2002 edition) a $10,000 investment using only the S&P500 Index your account would have increased by $11,408 if you had been invested just during May through October. Pretty shabby. However, if you were invested only from November through April that same $10,000 would have gained $314,056. Cowabunga! Who says you cant time the market?

If you were invested in a broad market index fund of any kind and switched to a money market during the Spring and Summer periods and been fully invested during the Fall and Winter you could be one of those qualified investors. You could have made an extra 700%. Thats real money. And there are better timing models.

Anyone can do this, but brokers tell you you have to be fully invested all the time. Nonsense. They are worried you might take your money out. Cash is a position. They will tell you it is too simplistic, but that is the beauty of it. Simple is always better.

This is the easiest of all timing models I know and it works. Take some time to study it. It can only increase your net worth. And you will sleep better.

Al Thomas

Albert W. Thomas has spent most of his life in the field of finance. In 1965 he founded an insurance holding company, Security Dynamics Investment Corporation, after having been an agent and General Agent for several life insurance companies. In 1970 he became cofounder and president of Real Life Estate, Inc., that marketed a unique real estate and life insurance package.

After he became interested in commodities he bought a seat for his personal trading on the Chicago Open Board of Trade, which is now known as the MidAmerica Commodity Exchange. Later he became a full time trader and also acted as a commodity broker for a few select clients. By fellow floor traders Al is considered to be an excellent technical analyst much of which is outlined in his book IF IT DOESN'T GO UP, DON'T BUY IT! It became a best seller on Amazon.

In 1981 he sold his membership on the Exchange and with his wife, Carolyn, lived full time aboard their 41' ketch, the Aumakua (which means guardian angel in Hawaiian). They sailed in Florida and the Bahamas for two years.

He founded World Trading Group in 1984 that grew to the seventh largest introducing commodity brokerage firm in the U.S. with 35 offices from coast to coast, Alaska and Canada. It was sold in 1992.

Al is a graduate of Northwestern University with a B.S. degree in Commerce and is a member of MENSA. He is now president of Williamsburg Investment Company that syndicates his weekly financial column since 1999 to more than 300 newspapers and writes a financial market letter called Over My Shoulder that is quoted in Barron?s and many other publications. A 3-month trial subscription is available on his web site. He is a regular guest on several financial radio talk shows.

His favorite pastime is fishing.

Mr. Thomas is available for speaking engagements. Please call 321-453-5300 for more information.