No. of Recommendations: 2
Well, I do not know how you came up with the 20% figure.

The market, as a whole, does trend. Obviously, you want to be in the market when it is trending up, and out of it when it is trending down. Determining the trend is not terribly difficult - just look at the charts. However, there is no way to look at a trend and say "this is going to be a 20% decline", or something else. It ends when it ends, and begins when it begins.

For example, look at the analysis I did here, some time ago (but it is still relevant):

Selling when you get the sell signal gives you more money with which to buy when you get the buy signal and get back in.

For good discussions of market timing, look at the Mechanical Investing Board:

That just gives you the last post - look at back posts, or post a question about market timing.

I have never found anybody who claimed to be able to pick an absolute top or bottom, but the trend is usually quite clear.

Now when the market begins a down trend, you have a couple of options. One is just to sell everything. It is virtually impossible for a mutual fund to buck the trend. Cash is the best place to be.

On the other hand, you could try going into one or more of the "short", or "inverse" funds. These short stuff, and so go up when the market goes down. This is a very risky strategy, and I do not recommend it. Those funds are very volatile, and you will have a hard time making enough money to keep you in Pepto Bismol.

There are also long-short funds.

I have not looked at those for several years, but last I looked the performance was not very good.
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