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True enough, Peter, HOWEVER, as the Market declines so does the total value of
your total holdings, which means that in the declining market you are
transferring ever smaller amounts of cash to the purchase of shares -- the
values of which are continuing to decline, and this continues, ad nauseaum.
This is nothing but variation of the old "dollar cost averaging" approach to
the purchase of equities, which also has intellectual attractiveness. The
problem is, that in the real world, none of these non-timing approaches really
work. As time progresses, and as the individual has to actually make and
implement the decisions that the "system" requires, the individual fails.
I have been in the investment business for more than 40 years and I have yet to
find a single individual who completes what they started out to do. You may be
the exception, but i would doubt it. There will come a time when even the
thought of actually doing what may be THEORETICALLY required will make you want
to vomit. And the losses that you will, by that time, have sustained will
drive you from the markets forever.
The pitiful part is when that time does arrive, you will probably not have the
time left in your investment life to recover.
It's too bad that these "gurus" with their practically flawed investment
approaches can't be forced to live their lives, and their eternity, in the
company of those individuals who have actually followed their advice.
Richard D. Funkhouser
PS Lichello's book is on sale at Trader's Press for $5.00. Those with a
charitable instinct would do well to buy up the available supply, and save the
unwitting bargain purchaser's some grief.
"Peter W. Aan" wrote:
> I have been using Robert Lichello's book "How to make $1,000,000 in the
> Stock Market Automatically" continuously since 1990, using Fidelity cash
> reserves and several funds (mostly sector)in my Keogh account.
>
> The book teaches a simple allocation timing system or formula that
> gradually moves $ from stocks to cash as your equities go up, and from cash
> to stocks and your equities go down. Seems like a good plan for a
> low-anxiety approach. It benefits most it your equities go through
> numerous bull moves/bear moves.
>
> For several years I was out performing the indices, but in recent years I
> have lagged behind, although my overall return has been quite good. The
> reason for this is that the nonstop bull market of recent years has had me
> little too little stocks and too much cash. However, when the inevitable
> bear market comes (it will come, won't it?) then my allocation will look
> good, and there will be lots of cash to pick up "bargains".
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