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Trade History by Market Timing Advisors12-YEAR TRADE HISTORY52 Trades in 12 Years33 Winners= 441.28%
19 Losers= -23.02%
Net Total= 418.26%
FROM 1/3/95 THRU 12/31/06
BUY AND HOLD VS. MARKET TIMING ADVISORSThe chart below shows the comparison of a "buy and hold" verses those We use the Comp as our indicator because it is the most representative of all the stocks in these indices. It is from this index that we derive our signals. We then apply the signals by buying into a Mutual Fund of the NDX or the S&P500. We use the Rydex Funds because they are a true "No Load" fund. That means there is no charge for buying, selling, or exchanging and they invite market timers to trade as often as they want. There are many other investment vehicles you could use, but there are transaction costs associated with them. The COMP column under BUY and HOLD shows the year's performance the index had for the year. The COMP column to the right of the gray column is the return achieved using our timing signals. The NDX and S&P500 columns reflect the actual return had you used them throughout that year with a Beta of 1. There is no leverage used in figuring these returns. Rydex does have a group of funds that have built-in leverage at a ratio of 2:1. These are called their Dynamic Funds and are internally leveraged so you do not need a Margin account and there are no fees and no borrowing charges involved. When using the Dynamic Funds, remember, you can make or lose Twice as much as the non-leveraged funds, so be careful! We normally use the NDX as our fund of choice, but we also use the S&P500 when the market conditions call for it. The Dow and the Russell 2000 are also available to use if you prefer. BUY AND HOLD MARKET TIMING ADVISORS
EXAMPLE GROWTH OF $1,000 INVESTMENT: BUY AND HOLD VS. MTAThe chart below shows the growth of a $1,000 investment on 12/31/94. By following MTA buy and sell signals, both long and short, at the end of 2006 the value had grown to $44,365.01. These are compounded results and do not consider the possible need to take out money to pay taxes. As you can see easily, the buy and hold method of investing would have been disastrous during the years of 2000 through 2002. The cumulative return dropped from up 441.17% down to only up 77.61%. At the same time, using the MTA system, the dollar value of the account went up from $6,307.85 to $20,025.84 during that same three year period. Although the buy and hold has gone up for the past four years, it is still down 49.86% from its highs at the end of 1999. This makes a strong case for playing both the long and short side of the market. Remember, when using the Rydex or Pro-Funds, you are not really shorting the market. When you buy shares of inverse funds you are really going long and make a profit when prices go down. You need not worry about how they do it. The porfolio managers have many years of experience.
The IRR(internal rate of return) for the 12 years is: BUY & HOLD COMP= 10.21% MTA COMP= 37.17% Charts and statistics are wonderful tools when trying to show the above history of the Market. What is not shown and cannot be depicted by a chart is the pain and mental anguish you would have had to endured during those three years when the market lost 82% of its value. The truth of the matter is, many investors left the market and some may never return. If only they had a helping hand to guide them through the bad times they would be in much better financial shape...DO NOT TRY TO GO IT ALONE! Click the link below to see our 12 year daily results in XLS format: |
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