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Methodology for Index Fund Investing

The trend trading and safe index fund investing charts on the different pages of this website show the closing level of the stock market index at the end of each month. Trend trading is one of the best stock market trading strategies. Our methodology is based on recognizing patterns in the monthly closing history of a stock market index.

These patterns tell us if we can expect the market to go up or to go down. We do not predict how many months or years the market will go up or down or how much. That we do not know. In general, we aim to follow trends that last at least 3 to 6 months. And by following these trends, we can make profitable investments in stock market indices.

In the charts, the blue line shows the closing values of the stock market index at the end of each month.

The green line in the history and long-term market timing charts gives a "buy" indication when it is up from the horizontal axis.

The red line in the history and long-term market timing charts gives a "sell" indication when it is up from the horizontal axis.

We recommend to increase your investments gradually when we give a buy indication; not to invest everything at once. We suggest to sell rather large chunks of the portfolio when we give a sell indication, so that the total portfolio can be sold in two or three steps. After a "sell" indication, we do not advice to buy untill there is a clear new "buy" indication.

We base our overall advice to buy, sell or hold by analyzing a number of different indices around the world and never by the trend or buy/sell triggers from one individual index. The strength of the methodology is in looking at all the indices, not just at one.

We know that the chart example above is too small. Registered users, however, can easily view our historic trend trading charts in a large and clear format. See our Why Register? page on why we recommend to register.

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