You can time the market – here’s how

While many investors dismiss trying to time the markets as a mug's game, it may be possible after all. Tim Bennett explains how using this simple technique.

Timing the market buying on the lows, and selling on the highs is usually seen as a mug's game. None of us can predict the future, after all. The fund-management industry often abuses this fairly sensible argument as a way to persuade investors that they are better off with passive buy and hold' just keep your money in the market all the time (and hence in their funds, generating management fees).

But Mebane Faber, portfolio manager at Cambria Investment Management, thinks differently. He thinks that, over the long run, if you use the right timing strategy, you can generate "equity-like returns with bond-like volatility". In other words, you get more reward while taking less risk. So how does it work?

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.