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Is Market Timing a Good Strategy? –

Trying to time when to get into and out of the stock market erodes investors’ long-term returns, says reformed market-timer Jeff Merriman-Cohen.

Past Columns

Advisers Brace for Another Volatile Year: How do you prepare? Pros at four firms talk about how they’re tweaking their portfolios to get ready.

Don’t Wait to Rebalance: Financial adviser Michael Chasnoff buys when prices tumble, rather than on a set timetable.

Advisers Preach Caution: Four financial advisers have stuck with their strategies, but tweaked some fund holdings.

Making Room for Midcaps: Mark Cortazzo, founder of financial advisory firm Macro Consulting Group LLC, puts more dollars in midsize companies than in giant stocks.

More in Investing in Funds

Spotlight: A Low-Cost Choice for Muni Income

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His Seattle investment advisory firm, Merriman Inc., was a market-timing money-management firm and newsletter publisher when launched by his father, Paul Merriman, in 1983.

Mr. Merriman used quantitative models to frequently buy and sell stock mutual funds, with the goal of catching the upside while avoiding downturns.

For nearly two decades, Mr. Merriman, and later his son, Mr. Merriman-Cohen, used market timing to manage their clients’ money, and they defended the strategy against criticism that it could not be done successfully.

But over time, father and son have become increasingly convinced by academic research which states that in the long run, most investors are best off in stock funds that trade less by buying the broad market and that charge low expense ratios. The lower costs boost investors’ returns.

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