"..you own stocks when they are above their 200 day or 10 month simple moving average and you don't own stocks when they are below the 200 day or 10 month simple moving average".
Why would that work?
check out that yahoo chart I posted.
basically, it tells you to sell when stocks fall a significant amount. then tells you to buy after they have started rising a significant amount.
but it keeps you invested at times like this, which seem scary but might not be.
That's crazy. It allows you to take a significant ride down ("tells you to sell when stocks fall a significant amount") and then makes a pure assumption that, after this significant ride down, the decline will continue. Which of course is just a guess. You may very well end up selling at the bottom just before the market begins to return.
There is no mathematical or logical basis to that system