How to Use a Timer

No timer bats 1,000, that's for sure. The question is how often do they have to be right in order to beat a buy-and-hold strategy? I think the answer to that question depends on how you use timers.

My recommendation is to use timers for their market wisdom and not for their asset allocation. The latter is, in too many cases, an all-or-nothing type of advice. Timers tend to recommend going from 100 percent invested in equities to 100 percent cash and, ultimately, back. (Timers develop egos that make them do this. Without egos they may become paralyzed at critical moments, like the top or bottom.)