iBankCoin
Joined Nov 11, 2007
1,458 Blog Posts

Faber’s Timing Model- Get Long at the Close

If you are a short-term trader and you aren’t familiar with Mebane Faber’s Timing Model, you are excused. However, if you manage your own 401K, or consider yourself a long-term investor more-so than a trader, you MUST read up on this timing model. I cannot over-emphasize the importance of it for the aforementioned types of investors.

Here are the rules, which cover 5 asset classes:

BUY RULE: Buy when monthly price > 10-month SMA.
SELL RULE: Sell and move to cash when monthly price < 10-month SMA.

  • All entry and exit prices are on the day of the signal at the close. The model is only updated once a month on the last day of the month. Price fluctuations during the rest of the month are ignored.

Simple, right?

Since today is the last trading day of the month, I think we should pay attention to what the model is saying.

It is looking as if we are going to get a buy signal on US Stocks (tradeable with VTI) and Foreign Stocks (tradeable with VEU).

This will put the hypothetical portfolio 80% invested, (already being long 10 Year Gov’t Bonds and Real Estate) with Commodities still sitting on the sidelines.

As you were…

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16 comments

  1. BernieCornfeld

    Thanks for pointing this out!

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  2. HawaiiFive0

    Very cool!

    Although, it looks like we would have to subscribe to read it.

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  3. HawaiiFive0

    I’m counting my coin as we speak. I went for the 2% model this time, so if we make the exit threshold, I’ll be very happy!

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  4. HawaiiFive0

    About .9 shy now. Hard not to take it with all of those buckos starring me int he face.

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  5. HawaiiFive0

    Got it at 37.74! Good enough for me!

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  6. HawaiiFive0

    You beat me. I’ve yet to get good with the key board. Did you do a market on close or a limit order or just sit there and time it better?

    Nevertheless, I am very satisfied and I’m starting to feel comfortable enough to start using the 2% model!

    So for the record by being in the system from the 6th and continuing through the 29th, I have 11 out of 13 wins, with 2 loses at -1.31% and -7.69 %, the larger loss the result of hitting a stop, and my biggest win at 10.76%.

    The total percentage gain is currently 1.809%.

    I think that’s pretty damn good in these volatile times!!!

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  7. Woodshedder

    Hey Forrest, how about that AGN today! WooHoo!

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  8. Homer Heineck

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