Slider navigation left arrow
Slider navigation right arrow

Buy and Hold Is Too Risky for Investors

In today’s fast-paced, global financial market place, investors are searching  ways to participate in the stock market advances without getting mauled in periodic bear markets that destroy capital.  This book and website provide a non-emotional, time-tested approach to investing that provides a common sense method to accomplish that goal using a combination of three components:  the Dashboard indicators, list of selected ETFs, and relative strength analysis.

All the details that you need to become a self-confident and self-directed investor are provided in a complete investing plan.  All the information you need to obtain to track the market and the ETFs that you invest in is provided free  on the weekly blog to this site including all the required Internet links.  In about five minutes every weekend, you can monitor the markets and your ETF investments to determine if any changes are necessary.

2010 Dashboard Performance

Since the first stock market signal was issued on this website on April 27, 2010 through December 31, 2010, the Dashboard has gained 9.07% compared to the NASDAQ’s 6.84% increase.  That 2.23 percentage point difference was accomplished even though the Dashboard was out of the market for 75.8% of all the days.  Here is the performance data:

Dashboard 2010 Performance

2011 Dashboard V2 Performance

The Version 2 Dashboard was introduced on March 12, 2011 in the blog.  This is a more simplified approach that uses only four indicators instead of the original eight .  Make sure to read the report and the data tables provided in the blog.

The Version 2 Dashboard performance for 2011 was worse than the NASDAQ Composite due to frequent trend changes.  In addition, hedge fund managers on average lost about 5% for their clients in 2011.  That should indicate how difficult 2011 was to make money. The Dashboard results are provided in this link:

Dashboard V2 Review for 2011 With Table 1l

2012 Dashboard Performance

The Dashboard signals performed well in 2012 compared to the market averages.  For the year the Dashboard produced a gain of 14.40% as measured by www.dark-liquidity.com,an independent site, compared to 7.30% gain for the DJIA, 13.4% gain for the S&P 500, and 15.9% gain for the NASDAQ Composite.  These figures are all without dividend reinvestment.  Be aware the BDH strategy was out of the market in cash or short-term bonds for 133 days or 36.3% of the year.  Therefore, on a risk-adjusted basis the BDH strategy did better than the benchmarks which are always 100% invested (assuming an investor uses an index mutual fund or ETF).  The average stock mutual fund gained 14.6% in 2012 with dividends reinvested according to Lipper, as reported in USA Today, page 2B, January 4, 2012 in article titled “Fund haters are only hurting themselves”.

Interestingly, the average Hedge fund performance was much worst at 5.5% in 2012 as tracked by HFR (page R4 WSJ, January 2, 2012).  The market’s ups and downs were not handled well by most Hedge funds. And don’t forget that the typical Hedge fund charges 2%/20% which means 2% of assets under management and 20% of profits.  So if you thought that Hedge funds have the edge in investing your money, you may want to rethink that premise.

2013 Dashboard Performance

This past year was one of the best performing years for the stock market since 1997.  For the year, the DJIA jumped 26.5%, the S&P 500 advanced 29.6%, and the NASDAQ Composite catapulted 38.3%.  Not so for the BDH strategy which increased only 6.10%.  This performance was very disappointing.   Interestingly, the average hedge fund run by  highly-paid professionals advanced about 9.3%, after fees (according to data tracker HFR), which is also well below the market averages.

During the year there were eight Dashboard buy signals ( “3” only, not counting “4”) and seven Dashboard  sell signals.  The most recent signals lost money as the market reversed direction soon after the new signal was given, so any gains were quickly given up.  Moreover, the 3% recommended stop LIMITs produced more losses than gains.  In retrospect, the 3% stop LIMIT order worked against the strategy as it was much too tight resulting in numerous whipsaws in and out the market.  Also, the same or a quite similar basket of ETFs were re-entered at a later time at a higher price on multiple occasions.

2014 Dashboard Performance — through November 14, 2014

The Dashboard has performed well so far in 2014 with a gain of 10.83%.  This compares to a performance of about 9.66% (for the Dow-Jones Industrial Average, S&P 500 and NASDAQ Composite averaged together.  For a complete picture of the Dashboard performance click the Blog button on the top of the screen to pull up the latest report.

DashboardV2 Chart with Up-to-Date Buy and Sell Signals

The link below provides all the recent V2 Signals:

http://stockcharts.com/h-sc/ui?s=$COMPQ&p=D&yr=2&mn=0&dy=0&id=p50034199149&a=250074893

Why This Website Was Developed

This site was developed specifically for investors who have read this book and want to use its  strategy to build wealth during market up trends and protect their principal during down markets.  If you happened to arrive at this website from another source, that is terrific.  Now you have an opportunity to learn about a better way of investing than continuing with the unsuccessful buy-and-hold approach.  Make sure to review the FAQs before going to the weekly blog postings to make sure that you understand how the strategy works, as well as how to easily obtain the market indicators on the blog, and to review the back-tested results.

If you haven’t purchased the book yet and would like to benefit from this website, I suggest that you just click on the top tab on the right (Buy It) and get going.  This book is available not only in hardcopy, but also in the Nook and Kindle editions, so you have no excuse not to buy it.  The Kindle edition can also be purchased for a laptop or desktop PC, not just the handheld device, by first downloading the free PC software from Amazon.  When you download the book, it will be available in seconds for the nominal price of $9.99.

This book provides a practical, easy-to-implement rule-based investing approach that investors can master quite easily.  Of course, to use the strategy you need to obtain the updated data on the Internet and I provide you with these free sites to you in the book.

This book will assist you in using the  strategy presented in this book to become smart profitable investors going forward.  Of course, your risk tolerance, covered in an early chapter, will determine how you allocate your assets between equities and fixed income vehicles.  Profitable investing is accomplished by first determining the market’s health using a group of market indicators, and then investing in a limited universe of exchange-traded funds, selected by a weekly relative strength analysis. Once the market trend has changed all equity positions should be sold and the proceeds are placed safely in cash awaiting  the next buy signal.

After reading the FAQs, go to the blog page for the latest market commentary, Dashboard readings, and backtest results (June 7 blog and also in the FAQ tab).

The blog  is updated weekly on Saturday or Sunday to keep you informed as to the Dashboard and  market conditions.   And of course reader comments and questions are always welcomed.

Disclaimer:

The information offered on this site is for educational purposes only. Investing and trading involves risk, and the user is solely responsible for any investing or trading decisions that he or she undertakes.  Historical stock market performance is no indication of future results.  Although the author has taken every precaution to present accurate data, he assumes no liability for errors or omissions.  It is offered without warranty of any kind. All concepts and ideas presented should be taken as points of departure for the individual’s own research.  You are responsible for your own investment/trading decisions. Recommendations are made without any consideration of your personal financial sophistication, financial situation, investing time horizon, or risk tolerance. Investments recommended may not be appropriate for all investors.  Use of this material constitutes your acceptance of these terms.