Market Timing: Be Defensive
Now is the time to sit on the sidelines, tighten stops, or play the market to the downside.
“Is the BE DEFENSIVE Signal Always Right?”
What this red-light signal means — and why it protects your portfolio even when it’s not perfect.
Remember the Goal
When you chose to implement the Successful Investing System™, the objective was clear:
Know when to buy and when to stay out by following market timing signals.
Rely on rules, not emotions, every decision guided by a proven framework.
Invest with structure instead of stress through disciplined trade setup and portfolio management.
Pursue consistent, long-term growth, applying timing signals, stock selection criteria, and stop-loss rules has historically produced ~15% annualized returns, enough to double a portfolio about every five years.
Even though past results don’t guarantee future gains, they give us confidence in the strength of our approach.
The Be Defensive signal is a key part of that plan. It’s designed to protect your capital when the market turns down.
What It Really Means
Be Defensive isn’t a prediction. It’s a warning based on data.
It signals that the market has entered a confirmed downtrend, often with more volatility ahead.
In plain terms, it’s the system’s way of saying:
“Now isn’t the time to push. Now’s the time to protect.”
The Honest Truth: No Signal Is Perfect
Could the market bounce tomorrow? Yes.
Could a short-term rally appear? Of course.
Sometimes declines slow down before continuing.
But here’s what years of testing proves:
Buying during a falling market is one of the most common, and costly, investor mistakes
The Be Defensive signal helps you avoid that mistake
It doesn’t need to be perfect. It just needs to keep you from taking unnecessary risks when conditions are stacked against you.
Why It Works
This signal is driven by VectorVest’s timing indicators, tracking momentum, direction, and rate of change.
History shows:
Ignoring Be Defensive often leads to sharp drawdowns
Respecting it helps protect capital and recover faster
Avoiding bad trades during downtrends is just as important as catching good ones in uptrends
That discipline is how the system supports its 15% annual return goal, and the foundation of the Double Every 5 Years Portfolio™.
What to Do When You See Be Defensive
Stop buying stocks, this phase is about preservation
Tighten stops on existing positions to protect gains and limit losses
If experienced, consider inverse or bearish opportunities
Watch the Market Timing screen daily for changes
The best offense in investing is often a good defense. This is that time.
Bottom Line
Is the Be Defensive signal always right? No.
Is it right often enough to protect your portfolio? Absolutely.
It won’t predict every twist or bounce, but it does give you an edge: avoiding emotional, poorly timed decisions that erode wealth.
Don’t second guess it. Don’t fight it.
Follow the system you trusted when you joined.
That’s how you invest with confidence, even when the market turns red.