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On Feb 13, 1:50pm, Steven C. Walker wrote:
> Subject: Stocks, bonds or money markets??
> Realtraders-
>
> A man by the name of Michael B. O'Higgins has written an intersting
> book titled, Beating the Dow with Bonds. This book deals with an asset
> class allocation method that directs you to stocks (and in particlar
> which ones), fixed income securities or money market accounts. Since
> 1969, according to the author, his method has returned 23.77% handily
> beating the S&P 500. The method goes like this....
>
> 1. If the current price of gold is higher than a year ago,
> allocate all funds to a money market account.
Since the price of gold didn't float until 1972 or so, then O'Higgins isn't
working with a lot of history. I looked at monthly gold prices, and
near aa I can tell, here are the months that you'd be sitting in cash:
7301 7405 7702 7806 7910 8212 8607 8711 9307 9504
7302 7406 7703 7807 7911 8301 8608 8712 9308 9505
7303 7407 7704 7808 7912 8302 8609 8801 9309 9507
7304 7408 7705 7809 8001 8303 8610 8802 9310 9508
7305 7409 7706 7810 8002 8304 8611 8803 9311 9512
7306 7410 7707 7811 8003 8305 8612 8804 9312 9601
7307 7411 7708 7812 8004 8306 8701 8806 9401 9602
7308 7412 7709 7901 8005 8307 8702 9002 9402 9603
7309 7501 7710 7902 8006 8308 8703 9003 9403 9604
7310 7502 7711 7903 8007 8512 8704 9008 9404 9605
7311 7503 7712 7904 8008 8601 8705 9009 9405 9606
7312 7505 7801 7905 8009 8602 8706 9010 9406 9608
7401 7506 7802 7906 8010 8603 8707 9106 9409 9609
7402 7507 7803 7907 8011 8604 8708 9107 9410 9812
7403 7508 7804 7908 8012 8605 8709 9305 9411 9901
7404 7701 7805 7909 8211 8606 8710 9306 9412
I attached a gif, showing the 1 year %-change in the price of gold.
Although this picks off some of the really bad months, it is interesting
that the percent change in the S&P in the months that would have been
in cash, was still a net positive, and averaged about 12% per year.
--
| Gary Funck, Intrepid Technology, gary@xxxxxxxxxxxx, (650) 964-8135
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