Home / Faber’s Timing Model

Faber’s Timing Model

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…

Comments »