Our bond timing model is used for trading mutual funds and exchange traded funds that hold high-grade U.S. bonds. Typically, high-grade bond funds hold U.S. treasuries, mortgage-backed and high-quality corporate securities. You can consult Morningstar at their website, www.morningstar.com, to find the average credit quality of any bond fund (look for funds that have an average credit quality of A or above). Practically every 401k plan has a high-grade general bond fund.

The objective of the timing model is to achieve returns that are similar to that of buy and hold, but at risk levels that are reduced by 30%. The system uses a trend-following approach and is designed to trade 1 to 2 round trips per year. At this time, we are not disclosing the exact trading rules of this model.

We are often asked if this model can be applied to high-yield junk bond funds. The short answer to this question is no. It is also not applicable to emerging market and foreign bond funds.

Click here to receive bond timing signals to your email account.