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Trade Execution
and Strategies

Our timing signals are computer
generated each trading day in the evening after
the markets have closed. Subscribers are sent an
email with the current signal before the markets
open the next trading day. We send this
notification before EVERY trading day even if
there is no change in position. Emails do become
lost or deleted and email servers do have down
time on occasion. So that you can always check
the latest signal, you will be given a user name
and password to our "Members" page
where signals are also updated every day.
Our
computer model generates one of three signals
each day. Either CASH, BUY or SELL.
A CASH signal indicates that the
model is unsure of the direction of the market
and subscribers should move to the safety of the
money market fund.
A BUY signal in indicates that
the model expects the market to move up and
subscribers should move to the mutual fund that
will increase in value as the market advances.
Appropriate investment vehicles are listed below
for various strategies that a subscriber may select.
A SELL signal in indicates that
the model expects the market to move down and you
should move to the fund that will increase in
value as the market declines. Appropriate
investments are listed below for strategies
subscribers may select. (Trades in IRA's and
other qualified retirement accounts or those
simply not wishing to profit from a market
decline should move to the safety of the money
market fund during SELL signals.)
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Trades or exchanges should
be executed as soon as possible after the model
generates a new signal. In most cases this
execution will be the close of trading on the
next business day after our signal is generated
because nearly all mutual funds set prices just
once a day at the close of business. We recommend
that subscribers move 100% of the market capital
that they've designated for this program to the
appropriate signal position.
Subscribers
using an investment vehicle that allows trades to
be placed at the open of the next day, such as
the QQQ or SPY, may wish to make signal changes
as soon as possible. Long term results may be
improved slightly by executing trades at the open
the following day instead of the close. However,
historical performance shows slightly better
results by executing trades on the "next
day's close" after the signal date.
Most
mutual funds now allow exchange orders to be
placed on-line or by telephone. We prefer to use
the on-line method but you are free to use which
ever feels more comfortable to you. Just be sure
to place your order early enough to receive
execution at the earliest possible opportunity.
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Our
timing model has been designed to work best on
funds correlated to the S&P 500 Index. Below
are several fund groups and other strategies
subscribers can employ to use our system.
Although we don't recommend one mutual fund group
below over another, we do recommend using no-load
mutual funds versus some of the other strategies
outlined. Exchange traded trusts (ETF's) such as
QQQ and SPY are also assumed to have been
purchased or sold at the close of the day
following the Buy, Cash or Sell signal. |
Funds
below with a beta of 1.0 will experience
approximately the same volatility as the base
index. Those with a beta of 2.0, for instance,
attempt to have twice the volatility of the base
index. Funds with a beta over 1.0 offer the
potential for much higher annual returns but also
result in much higher fluctuations in equity. You
should decide whether higher potential return or
less equity volatility is more important to you
when selecting the investment vehicle to use with
our service. |
Pro Funds No-Load 1.0 Beta Strategy
www.profunds.com (888)
776-3637
BUY Signal - Bull Fund (fund attempts to mirror 100%
of the return of the S&P 500 Index)
SELL
Signal - Bear Fund
(fund attempts to mirror 100% of the opposite of the
return of the S&P 500 Index)
CASH
Signal - Money
Market Fund
$1.00
invested in 1987 would have grown to $163.30
Approximate Total
Return from 1/1/1987 to 12/31/2004: +16,230.16%
Approximate Compound Annual Return from 1/1/1987
to 12/31/2004: +32.71%
Largest Drawdown From Peak: -19.48% Worst Losing
Trade: -8.78%
vs.
Buy/Hold 1.0 Beta Compound Annual Return
from 1/1/1987 to 12/31/2004: +9.25%
Buy/Hold 1.0 Beta Largest Drawdown From Peak:
-49.15%
Buy/Hold $1.00 invested in 1987 would have
grown to $4.91
Pro Funds No-Load 2.0 Beta Strategy
www.profunds.com (888)
776-3637
BUY Signal - UltraBull Fund (fund attempts to mirror
200% of the return of the S&P 500 Index)
SELL
Signal - UltraBear
Fund (fund attempts to mirror 200% of the opposite of the
return of the S&P 500 Index)
CASH
Signal - Money
Market Fund
$1.00
invested in 1987 would have grown to $15,029.14
Approximate Total
Return from 1/1/1987 to 12/31/2004: +1,502,814.94%
Approximate Compound Annual Return from 1/1/1987 to
12/31/2004: +70.59%
Largest Drawdown From Peak: -38.29% Worst Losing
Trade: -17.56%
vs.
Buy/Hold 2.0 Beta Compound Annual Return
from 1/1/1987 to 12/31/2004: +12.86%
Buy/Hold 2.0 Beta Largest Drawdown From Peak:
-53.46%
Buy/Hold $1.00 invested in 1987 would have
grown to $8.84
Rydex Funds No-Load 1.5 Beta
Strategy
www.rydexfunds.com (800)
820-0888
BUY Signal - Nova Fund (fund attempts to mirror 150%
of the return of the S&P 500 Index)
SELL
Signal - Ursa Fund
(fund attempts to mirror 100% of the opposite of the
return of the S&P 500 Index)
CASH
Signal - Money
Market Fund
$1.00
invested in 1987 would have grown to $757.92
Approximate Total
Return from 1/1/1987 to 12/31/2004: +75,692.32%
Approximate Compound Annual Return from 1/1/1987
to 12/31/2004: +44.51%
Largest Drawdown From Peak: -28.96% Worst Losing
Trade: -10.49%
vs.
Buy/Hold 1.5 Beta Compound Annual Return
from 1/1/1987 to 12/31/2004: +11.25%
Buy/Hold 1.5 Beta Largest Drawdown From Peak:
-51.94%
Buy/Hold $1.00 invested in 1987 would have
grown to $6.81
Rydex Funds No-Load 2.0 Beta
Strategy
www.rydexfunds.com (800)
820-0888
BUY Signal - Titan 500 Fund (fund attempts to mirror 200% of the return
of the S&P 500 Index)
SELL
Signal - Tempest
500 Fund (fund attempts to mirror 200% of the opposite of
the return of the S&P 500 Index)
CASH
Signal - Money
Market Fund
$1.00
invested in 1987 would have grown to $15,029.14
Approximate Total
Return from 1/1/1987 to 12/31/2004: +1,502,814.94%
Approximate Compound Annual Return from 1/1/1987 to
12/31/2004: +70.59%
Largest Drawdown From Peak: -38.29% Worst Losing
Trade: -17.56%
vs.
Buy/Hold 2.0 Beta Compound Annual Return
from 1/1/1987 to 12/31/2004: +12.86%
Buy/Hold 2.0 Beta Largest Drawdown From Peak:
-53.46%
Buy/Hold $1.00 invested in 1987 would have
grown to $8.84
Standard & Poors Depository
Receipts
SPY (Trades on AMEX)
BUY Signal - SPY (Buy long in broker margin account)
SELL
Signal - SPY (Sell
short in broker margin account)
CASH
Signal - Broker's
Money Market Fund
(Commissions and slippage not included below)
$1.00
invested in 1987 would have grown to $163.30
Approximate Total
Return from 1/1/1987 to 12/31/2004: +16,230.16%
Approximate Compound Annual Return from 1/1/1987
to 12/31/2004: +32.71%
Largest Drawdown From Peak: -19.48% Worst Losing
Trade: -8.78%
vs.
Buy/Hold 1.0 Beta Compound Annual Return
from 1/1/1987 to 12/31/2004: +9.25%
Buy/Hold 1.0 Beta Largest Drawdown From Peak:
-49.15%
Buy/Hold $1.00 invested in 1987 would have
grown to $4.91
Nasdaq-100 Trust
QQQ (Trades on AMEX)
BUY Signal - QQQ (Buy long in broker margin account)
SELL
Signal - QQQ (Sell
short in broker margin account)
CASH
Signal - Broker's
Money Market Fund
(Commissions and slippage not included below)
$1.00
invested in 1987 would have grown to $1,759.78
Approximate Total
Return from 1/1/1987 to 12/31/2004: +175,878.42%
Approximate Compound Annual Return from 1/1/1987
to 12/31/2004: +51.43%
Largest Drawdown From Peak: -34.26% Worst Losing
Trade: -17.25%
vs.
Buy/Hold 1.0 Beta Compound Annual Return
from 1/1/1987 to 12/31/2004: +14.44%
Buy/Hold 1.0 Beta Largest Drawdown From Peak:
-82.90%
Buy/Hold $1.00 invested in 1987 would have
grown to $11.34
If
you are unable to use the above fund groups in
your retirement or other account, you may use the
fund that most resembles the S&P 500 as your
BUY signal investment vehicle and move to
the money market fund when a CASH or SELL signal is issued.
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Your returns should approximate
slightly less than those of the 1.0 Beta strategy
above if you cannot use a short position fund. Please
check with your mutual fund group to make sure
you are allowed to make multiple exchanges
between funds. |
Historical
Trades
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"It's not
easy to get rich in Las Vegas, at Churchill Downs or at
the local Merrill Lynch office..."
- Paul A. Samuelson, MIT
Economist, Nobel Laureate in Economics
The Way To Trade If you must.
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