Do you have what it takes?
Mebane Faber had a great post on Successful Market Timing. His post also contains excerpts from a Paul Merriman article called Do you have what it takes to be a successful market timer? Both are excellent reading.
As both Faber and Merriman point out, following a mechanical market timing system takes considerable discipline. While it sounds simple, emotions are a very powerful thing - they can compel us to act impulsively. To be a successful market timer, one must be able to control one’s emotions and impulsiveness. The beauty of a mechanical market timing system is that it is absolutely unemotional - the voice of reason. To the timing model it’s simply applying rules and formulas to a bunch of data. To humans it’s a tug between the extremes of fear and greed.
Whenever you start to feel fear and doubt, go back and read Faber and Merriman to get grounded. Deep inside, you just might have what it takes.