Market Timing Strategy of Travel and Leisure Sector
in Borsa Istanbul
Alp Polat*, Tuba Sevil** and Guven Sevil***
Recent literature introduces that travel and leisure sector is
found to be useful to implement a timing strategy. This
strategy involves tracing discount rate changes and
investing. Changes assume that buying travel and leisure
stocks is beneficial due to expansive monetary conditions. If
discount rate changes become negative, the portfolio
should be shifted to government debt securities. The
strategy is tested using Turkish market data. Values of the
sector index and government debt securities are employed
in the analysis. The announcements of Central Bank of
Turkey determine expansive and restrictive monetary
periods. Treynor and Sharpe ratios are calculated in order
to compare the strategy with passive strategy benchmark.
The results showed that market timing strategy is better
alternative to passive investment decisions in travel and
leisure sector. Market timing sustains higher portfolio
performance measures. The study presents importance of
monetary decisions of the Central Bank and profitable
strategy for investors.
JEL Codes: F45, G11 and G15