Service advising when to buy and sell index-funds. Does it work?

[danielu]

Hi guys,

I´m an aspiring mustache living in Sweden, doing some investements in indexfunds.

I stumbled on a web page called indexinvestering.se that seems great, I need your help on this. Click the English flag in the upper right if you don´t understand Swedish.
What´s the catch? This seems a bit too good.

Is it Worth $12 a month (Trend index service) for advice on when to buy or sell index funds?  So the Company behind this service does not keep my Money, they only give advice.

So what does this service offer? This is copied from the web page:

We will inform you on time
Our signal models monitors the market constantly and informs you when it is time to act in both bull market and bear market so you can spend time on other things.

Clear signals
You do not remember any login or daily visit any website. We will inform you clearly and directly at trend reversal or beneficialbuying opportunity by e-mail.

Cheapest insurance *Our service is most likely the cheapest insurance* To protect your capital. If you can afford Spotify you can afford us.

Signal model TREND analyzes and determines the current long term trend direction (primary trend) for the Stockholm Stock Exchange with a focus on providing clear information as early as possible at a potential trend reversal, but at the same time minimizing the number of false signals.

TREND has historically provided sell-signal only 10-15% from the highest quotation (IT crash + financial crisis) which has contributed to an annual average return> 20% since 1999.

Maximum risk in the investment according to the signal model TREND is -25% since the signal model has a built-in stop loss. As a reference, Stockholm Stock Exchange fell during the IT crash (2000-2002) by 73% and past the financial crisis (2007-2008) with over 58%.

Statistics is attached. The service started with support for the Swedish index but now also supports:

•DAX 30 (Germany)
•Dow Jones (US)
•Nasdaq (USA)
•OMXC20 (Denmark)
•OSEBX (Norway)
•S & P 500 (USA)

[Jack]

Any such service is utterly pointless and a total waste of money because if you're trying to time the market you're Doing It Wrong^(TM) to begin with!

[Heckler]

http://qz.com/487013/this-game-will-show-you-just-how-foolish-it-is-to-sell-stocks-right-now/

Here's a test for you.  Run it 20 times and report back you win/lose ratio.   This one is free. 

[forummm]

Does it work? Yes, it makes $12/month per subscriber for the people selling the service.

Will it make you richer? Unlikely.

[ShoulderThingThatGoesUp]

If this worked, they wouldn't care about your $12 because they would be too busy showing the contestants of Miss Universe around their palace of cocaine.

[meghan88]

If this worked, they wouldn't care about your $12 because they would be too busy showing the contestants of Miss Universe around their palace of cocaine.

Brilliant!

[dinkhelpneeded]

It could be for tax loss harvesting purposes? That might be what the OP intended?

[Kaspian]

Does it work? Yes, it makes $12/month per subscriber for the people selling the service.

Will it make you richer? Unlikely.

^^This.  It works 100% of the time when somebody signs up.  But for the end user?

Buy/Sell!!  They have to be right about 50% of the time. 

[thd7t]

I offer a similar service for free.

Buy now. Hold until you start drawdown.

Check this post as often as you want. I update it constantly!

[danielu]

ok, thanks for the feedback. Maybe I deserved that :)

So trying to time  the market is a useless strategy? It can´t be timed, as simple as that?

[forummm]

So trying to time  the market is a useless strategy? It can´t be timed, as simple as that?

Not reliably. And if someone could somehow figure it out, they wouldn't tell you for $12.

[MustacheAndaHalf]

The difference between market timing and index investing can be subtle enough for people to ignore.  If you time your purchase, it can make money.  And if you don't do much tracking, you can increase your wealth since most stocks tend to go up over time.  The problem is that you're paying for a worse strategy than index investing.  Over months or years, you get increasingly likely to fall behind the performance of an index fund.

Active timing takes greater risks for lower long-term rewards, and you need to compare long-term records to see it.

[forummm]

There are many arguments about market timing. It's easy to find back tests that support a particular method (that's frequently how the methods were developed--they "worked" in the past). But the problem is whether they will work in the future. Let me save you some effort and money--don't try to market time.

[danielu]

I offer a similar service for free.

Buy now. Hold until you start drawdown.

Check this post as often as you want. I update it constantly!

Cool, I can pay you $13 :)
My old man has been buying stocks in large companies for the last decades and never sold anything.
It has worked well for him even though it's not index funds.

[danielu]

There are many arguments about market timing. It's easy to find back tests that support a particular method (that's frequently how the methods were developed--they "worked" in the past). But the problem is whether they will work in the future. Let me save you some effort and money--don't try to market time.

I'm buying index funds the same date every month as salary arrive. Then I'm putting in extra money now and then when selling used stuff online whenever I can.

This is an interesting topic and even though I have a gut feeling against market timing, I have a curious nature.

[Kaspian]

There are many arguments about market timing. It's easy to find back tests that support a particular method (that's frequently how the methods were developed--they "worked" in the past). But the problem is whether they will work in the future. Let me save you some effort and money--don't try to market time.

I'm buying index funds the same date every month as salary arrive. Then I'm putting in extra money now and then when selling used stuff online whenever I can.

This is an interesting topic and even though I have a gut feeling against market timing, I have a curious nature.

Yep--smart!  That's how most of us are doing it as well.  (Even the "used stuff online" selling.)

Nobody should advocate it, but there is data to say "buying the dips" generally works.  I regularly plow every single cent I can into index funds but if the market goes dramatically down over a few days because of some ridiculous news headline (e.g., Portugal's debt, the US "fiscal cliff" deadline, Russia into Ukraine, or some other flavor-of-the-month nonsense) I will try and scrounge the very bottom of the barrel to come up with an extra $100-200 and make a buy at a steep discount.