Weekend Report
by Dr Invest
Do what? The Dow climbed how many points? Uhh 203 points? Really! Duh oh! There are a lot of things I could predict, but not that the DOW would go up 1.62%.
Stupidity defies intelligence, statistics show that recession is preceded by bear rallies. What is it in we humans that remains hopeful that the winds of fortune will blow our way even though all the facts point toward financial calamity?
Many books have been written on the psychology of the trader. Deep inside there is a confidence that though others may fail, I will succeed. So we keep blindly taking chances that can only result in further losses in our portfolio.
Keeping the Faith
Repetition is the price of learning. I am using the IVY PORTFOLIO METHOD. Go back and read my blog beginning in MAY. I am also utilizing SEASONAL CHARTS. There are certain investments that do better at different times of the year than at other times. I look at thirty year charts covering a 12 month period. I don't invest in "heating oil" if it is summertime; instead, I wait until the fall when the demand for "heating oil" returns. The demand for "heating oil" is shown in SEASONAL CHARTS.
Most gains are made from the end of October until the end of April. Over previous 30 years, the average gain from the DOW has been around 12%. This takes into account the bad seasons of the year as well as the good seasons and also takes into account both the good stock performances and poor stock performances. 12% is the average of the losses and gains.
But what would happen if you were invested in the DOW at only the season in which the DOW saw gains? Breakpoint Trades gives us some statistics. http://blog.breakpointtrades.com/2012/03/sell-in-may-and-go-away-statistics.html Some of the traditional investment advisers claim it makes no difference, but when you see these statistics the result of the strategy is evident.
Remarkably, what the chart above shows is that you would have made more using the BUY at the 1s of November and hold until the end of April, than you would have made even with the BUY AND HOLD METHOD.
So the Financial Adviser is just WRONG! As we move toward the end of October, we want to carefully look at the Stock Market to determine if we can move into a STOCK POSITION. I believe that Bernanke will has stimulated the economy before the presidential election and that some return can be made.
The fall in the weak market that I had seen early in 2012 will not likely happen until 2013. So I will stay away from stocks for now and keep my BOND PORTFOLIO containing TIP and BND.
(Note: the above article is for entertainment purposes only and not to be used as investment advice.)
Do what? The Dow climbed how many points? Uhh 203 points? Really! Duh oh! There are a lot of things I could predict, but not that the DOW would go up 1.62%.
Stupidity defies intelligence, statistics show that recession is preceded by bear rallies. What is it in we humans that remains hopeful that the winds of fortune will blow our way even though all the facts point toward financial calamity?
Many books have been written on the psychology of the trader. Deep inside there is a confidence that though others may fail, I will succeed. So we keep blindly taking chances that can only result in further losses in our portfolio.
Keeping the Faith
Repetition is the price of learning. I am using the IVY PORTFOLIO METHOD. Go back and read my blog beginning in MAY. I am also utilizing SEASONAL CHARTS. There are certain investments that do better at different times of the year than at other times. I look at thirty year charts covering a 12 month period. I don't invest in "heating oil" if it is summertime; instead, I wait until the fall when the demand for "heating oil" returns. The demand for "heating oil" is shown in SEASONAL CHARTS.
Most gains are made from the end of October until the end of April. Over previous 30 years, the average gain from the DOW has been around 12%. This takes into account the bad seasons of the year as well as the good seasons and also takes into account both the good stock performances and poor stock performances. 12% is the average of the losses and gains.
But what would happen if you were invested in the DOW at only the season in which the DOW saw gains? Breakpoint Trades gives us some statistics. http://blog.breakpointtrades.com/2012/03/sell-in-may-and-go-away-statistics.html Some of the traditional investment advisers claim it makes no difference, but when you see these statistics the result of the strategy is evident.
Remarkably, what the chart above shows is that you would have made more using the BUY at the 1s of November and hold until the end of April, than you would have made even with the BUY AND HOLD METHOD.
So the Financial Adviser is just WRONG! As we move toward the end of October, we want to carefully look at the Stock Market to determine if we can move into a STOCK POSITION. I believe that Bernanke will has stimulated the economy before the presidential election and that some return can be made.
The fall in the weak market that I had seen early in 2012 will not likely happen until 2013. So I will stay away from stocks for now and keep my BOND PORTFOLIO containing TIP and BND.
(Note: the above article is for entertainment purposes only and not to be used as investment advice.)
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