You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Beating Buy and Hold
- Thread starter jj_jere@hotmail
- Start date
Hi, I dont agree with Brutus, since I have seen many people publishing their systems, very good once. Beating buy and hold is difficult if it comes to the dow30, especially if you do back testing. I think you can really do better then B&H if you activlly trade your account with very low commission. I think TA only works on short term trading, but ....
I checked the page dogsofthedow, and would like to contact some historical testing, if in any way (ASCII) the data needed is available. So anyone has this data?
vk
I checked the page dogsofthedow, and would like to contact some historical testing, if in any way (ASCII) the data needed is available. So anyone has this data?
vk
Check out http://www.tortoisecapital.com
I heard a presentation by the guy that runs this site. He does something called mutual fund switching. The premise, if I remember correctly, is that strong mutual funds should continue to perform well over a period of weeks to months. I guess he's been doing this strategy for years. I can't personally attest to his method, but it's certainly worth looking into. FWIW the presentation was from a tape series that Van Tharp did, and I believe Van is using this strategy for investing.
I heard a presentation by the guy that runs this site. He does something called mutual fund switching. The premise, if I remember correctly, is that strong mutual funds should continue to perform well over a period of weeks to months. I guess he's been doing this strategy for years. I can't personally attest to his method, but it's certainly worth looking into. FWIW the presentation was from a tape series that Van Tharp did, and I believe Van is using this strategy for investing.
I read a little about Mark Boucher, it looks like a good book for trading. I'm looking for something that I can intermediately trade SPY's with. I guess Boucher uses TA and PE ratios of the overall market to determine to be in or short?
I noticed that there is a chat group in Yahoo that follows his systems.
I've checked out "sector switching" with Fidelity, They sent me a book about Fidelity Funds and one of the chapters was about switching sectors. It seems that you can beat "Buy and Hold" by about 1-2% a year by switching to the best performing sectors. Strange also, that you can beat it by the same % if you switched to the worst performing sectors!
I've also read somewhere that it's the same with mutual Fund switching. Probably just a random event over the past decade????
Any SIMPLE systems for trading an INDEX out there?
JJ
I noticed that there is a chat group in Yahoo that follows his systems.
I've checked out "sector switching" with Fidelity, They sent me a book about Fidelity Funds and one of the chapters was about switching sectors. It seems that you can beat "Buy and Hold" by about 1-2% a year by switching to the best performing sectors. Strange also, that you can beat it by the same % if you switched to the worst performing sectors!
I've also read somewhere that it's the same with mutual Fund switching. Probably just a random event over the past decade????
Any SIMPLE systems for trading an INDEX out there?
JJ
I don't really want to come across pushing Boucher's wares, but he has a proven trackrecord as a hedge fund manager. He even made it to the top of Nelsons Money Manager ratings a few years ago for 5 year compound returns (if I remember correctly). His models are simple and make sense. That's all you can ask, imo.
From the responce I got, I whould conclude that Buy and Hold is my best alternative. Unless someone has the 'Holly Grail', and is keeping it to themselfs. In the 90's it looked like earnings were the dominating factor. In the 80's is was interest rates. In the 70's nothing seemed to work.
jj
jj
You should read "How I trade for a Living" by Gary Smith. At the time it was written he was certainly beating the indexes using a system based on mutual fund switching near the close. This sometimes resulted in a holding period of a day or two and dometimes weeks or months. It is as close to your requirement as I can recall.
Regarding the Dogs of the Dow, you should understand that the system does not work any more.
Examine the performance listed on the web page whose link appeared earlier. Performance has been declining every year for the past 5 years. The creator of that system was interviewed on one of the financial channels within the last month or so. Probably CNBC, but it might have been one of the others, as I watch them also. One segment of the interview began with the system creator flatly stating the that Dogs of the Dow does not work any more.
Bottom line: don't trade any money using that system, let alone the thought of using your IRA account!
Sy Harding has an excellent seasonal timing, no-work system that you might want to consider for your IRA. It can be Dow based, if you like. http://www.streetsmartreport.com/
As for shorting, there are mutual funds that offer shorting. The best known of these is the Prudent Bear fund run by David Tice, who was on CNBC as recently as yesterday. The low NAV and minimal requirements will allow you to hedge or just short. You can be as passive or aggressive as you want.
Lastly, concerning Gary Smith, I too read his excellent book. Gary has since disappeared since the crash of 2000. He had an article or two in Active Trader magazine, and that is about it. His system of trading mutual funds might not work anymore. Even load funds like Putnum were offering 20% annual return in the 90's. It was not that difficult to make money when the stock market kept going up. You cannot trust any mutual fund or trading system based on mutual funds now.
Examine the performance listed on the web page whose link appeared earlier. Performance has been declining every year for the past 5 years. The creator of that system was interviewed on one of the financial channels within the last month or so. Probably CNBC, but it might have been one of the others, as I watch them also. One segment of the interview began with the system creator flatly stating the that Dogs of the Dow does not work any more.
Bottom line: don't trade any money using that system, let alone the thought of using your IRA account!
Sy Harding has an excellent seasonal timing, no-work system that you might want to consider for your IRA. It can be Dow based, if you like. http://www.streetsmartreport.com/
As for shorting, there are mutual funds that offer shorting. The best known of these is the Prudent Bear fund run by David Tice, who was on CNBC as recently as yesterday. The low NAV and minimal requirements will allow you to hedge or just short. You can be as passive or aggressive as you want.
Lastly, concerning Gary Smith, I too read his excellent book. Gary has since disappeared since the crash of 2000. He had an article or two in Active Trader magazine, and that is about it. His system of trading mutual funds might not work anymore. Even load funds like Putnum were offering 20% annual return in the 90's. It was not that difficult to make money when the stock market kept going up. You cannot trust any mutual fund or trading system based on mutual funds now.
From what I understand a simple system of being in the market from November until April and out of the market from May until October can provide returns that substantially outperform a buy and hold strategy. This seasonal approach will keep you in for the Christmas and January rallies and out of the October massacres. Also on a percentage basis the worst performing month of the year has historically been September. I have forgotten the actual numbers but the returns on a ten thousand dollar investment were three times greater than buy and hold.
Good trading
Good trading
Just as you have to question companies accounting records you also have to question the merits of buy and hold. Buy and hold what, for how long. If you are indexing - the components change will you still be holding the losers? Do you have Buffets foresight. will you be able to buy low pe/ strong international growth companies. Does buy and hold really work or was it a statistical lie of the bull market?
Most wall street guys do do not make enough money to buy a house on Round Hill Road in Greenwich CT because they put the investor first. Just look at the lessons of the dot com. Did any of the big wall street firms tell investors to stay away from companies with little or no chance to make money. No they took them IPO because they got 7% of the IPO and made millions more in side deals. So who is telling you to buy and hold and where did they get the information?
Most wall street guys do do not make enough money to buy a house on Round Hill Road in Greenwich CT because they put the investor first. Just look at the lessons of the dot com. Did any of the big wall street firms tell investors to stay away from companies with little or no chance to make money. No they took them IPO because they got 7% of the IPO and made millions more in side deals. So who is telling you to buy and hold and where did they get the information?