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Some interesting insights.
Sincerely,
John
> Historical Trends Revealed
>
> _____________________________________________________________________
> ~ J.P. Morgan's classic retort
> : " Stocks will fluctuate " is often
> quoted. Many investors agree with this
> statement. However while stocks do
> fluctuate they do so in well defined
> often predictable patterns. These
> patterns recur too frequently to be
> the result of chance or coincidence.
> How else do you explain that since
> 1950 practically all the gains in the
> " MARKET " were made during: November
> Thru April, compared to almost
> nothing: May Thru October. this is
> known as the Halloween Strategy, Get
> in the Market on Oct 31 & get Out
> right before Easter. this strategy
> cuts your Risk in Half & Doubles your
> Reward. Predicting the direction of
> the market with a certain degree of
> accuracy is indeed possible. It is
> like predicting the weather, while it
> is indeed possible to predict the
> weather with a degree of certainty.
> One must keep !
> in mind
> certain variables. Predicting the direction of the market is no
> different. Their are random variables that must be taken in to account.
> Weather wise look at the pattern of storms, the 15 year perfect storm,
> etc... Now if in 1950 you had invested $ 10,000 in the Dow Jones
> Industrials & Compounded the gains, Nov - April Strategy you would have
> $ 461,774 profit !! & Had you been in the market May - October instead,
> a $ 10,000 investment during these months since 1950, you would have a
> debt, or loss of $1,625 !! Wow ! The S&P Results would be similar. Now
> Thats say you add technical analysis to this system & the market was
> trending up & you were to stay in & follow the trend to completion &
> sell once the trend starts to reverse? & if the market was trending
> down early you were to sell your position? Using the same time frame
> from above & our same $10,000 investment compounded since 1950 , From
> Nov thru April, or longer or shorter depending on the trend, how much
> money would ! you have
> ? Well instead of the $461,774 over a 53 period, you would have tripled
> your return to: $1,308,314 !!! Wow !! However your loss from the worst
> Months, May thru October your loss during that same period would have
> deepened to a loss of $ 7,000 ( vs ) a $ 1,625 loss with out trending
> !!! Impressive results for being in the market for 6 months & no Stock
> picking. During a 6 1/2 month investment. Wow! Now Suppose you had
> enhanced your portfolio with options !! as to indicator any trend
> following indicator will do, MACD / RSI / MFI / ROC etc... I will
> have a follow up Article this one titled What Should We Expect Based on
> History. ~ Bill ~ if you liked this "ARTICLE" Pass it Along To a
> Friend or Group that you believe will enjoy it !!!! & Also the clubs
> Link! Remember we have the largest & Best Links of any Investment Club
> !!! Also our Educational Articles, Economic & Market News Are The "
> BEST " Link is below click on it & { Join Today } AA+Quants investment
> club !!
> :
> http://www.groups.yahoo.com/group/AAQuants/join { Join Now !! }
>
>
>
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