The Iconoclast Investor

My investing idea for today goes back to the Simplified Cabot Market Timer I wrote about a few days ago.  It’s also a simple idea, but it should do well for you as the market deals with a stagnating economy and takes the measure of the new administration.

This idea is this: When you get a buy signal from the Market Timer, take a position in the iShares S&P 500 Index exchange traded fund.  You can pick either the S&P 500 Index (SVV) or the S&P 500 Growth (SVW), if you’re feeling a little more aggressive.  Either one will gain you broad exposure to large-cap stocks that represent every sector in the U.S. market.

If the Simplified Cabot Market Timer turns negative on you, all you need to do is sell the iShares ETF and move back into cash.

While this investment idea doesn’t have the giant upside potential of individual stocks, I can virtually guarantee you that it will beat the performance of the broad market, which is all the managers of most of your 401(k)s and IRAs are trying to do anyway.