Tuesday, September 07, 2010

Replace Buy-and-Hold

Buy Sell Hold
Click Here to Replace Buy-and-Hold with an Upgrading Strategy

"Trends don't last forever, so why would you hold the same investment forever?"

History will repeat itself - are you ready?

* Did you successfully avoid the recent Bear Market?

* Or did you ride the market down with the "Buy and Hold" crowd?

* Did you see the warning signs before the bear market took hold?

If you are like most average American households, you saw your investments plummet in value by over 50% in the course of a few short months.

By the time the bear market hit the newspapers, most of the damage to Main street investor portfolios was already done.

Buy and Hold Facts

* You experienced a lost decade of returns if you practiced buy and hold during 1998 and held through 2008

* You experienced a 37% drop if you bought and held in 2008

* It will take a 58.7% positive return just to get back to break-even levels if you bought and held in 2008

* Trends don't last forever, so why hold a stock forever?

* Tying up capital in a losing trade prevent you from participating in other asset classes and sector that are outperforming the market

* The mantra of "buy and hold" is preached by the mutual fund sales industry as a client retention strategy to prevent people moving from fund to fund. It's a lot easier for mutual fund sales staff to increase commission income by signing up new customers, as opposed to growing the assets they manage on behalf of existing customers. It's a business that was build on a model of paying a captive sales force generous long-term fees

The Bottom Line on "Buy-and-Hold"

The strict practice of "Buy and Hold" is an outdated investment strategy that has not performed well over more than a decade. Alternate investment strategies exist that not only outperform buy and hold results, but will also help preserve your portfolio capital in times of market distress. One of the best alternative investment strategies to Buy and Hold is Upgrading...

So What is Upgrading?

Upgrading is a process of continuously investing within the top performing segments of the stock market. Throughout business cycles and changing economic environments, stock market leadership regularly rotates through different sectors, regions and asset classes. As new leadership positions in the stock market emerge, an upgrading process will continuously guide you into the best performing sectors of the market. Before you can
implement an upgrading system you need to create a system that will regularly compute and rank all available sector investments by their overall performance potential.

How Do You Rank and Analyze Sectors?

The Sector Timing Report strategically analyzes and ranks sectors, indexes and alternate asset classes by their performance strength using our proprietary SECTOR SCORE ranking engine.

The SECTOR SCORE is a multi-variable mathematical model that analyzes multiple timeframes of price trend data movement within each sector, as well as its comparative pricing movement in relation to the overall market index.

The Sector Timing Report then ranks sectors in descending order of SECTOR SCORE each month to sort the marketplace leaders to the top of a ranking list.

The highest ranked sectors are outperforming the rest of the stock market index over the longer term, and this is where you will want to position your portfolio. As leadership of market sectors change, you will see new leading sectors rise to the top of the rankings, while under performing sectors drop in ranks.

When Buy and Hold becomes "Buy and Sold"

Once a sector has fallen out of favor and is no longer within the top-quartile of sector out-performers, or it has broken out of its up-trend, we will sell that sector and shift our gains into the next highest-ranked sector in our SECTOR SCORE ranking index.

How Has Upgrading Performed?

Over the long term an upgrading process can help you outperform most mutual fund managers and the market index. During bull markets you will see the strongest sectors driving market gains ascend to the top of the list, while in bear markets you will see alternate asset classes, inverse sector funds and safe haven sectors dominate the top of the ranking list. The Sector Timing Report has outperformed the market and most mutual funds and advisory newsletters over the last several years, and successfully avoided the carnage of the 2008 bear market.

Click Here to View the Results of the Sector Timing Report Model Portfolios

Upgrading is Simple to Use

To use the Sector Timing Report you simply remain invested in the top ranked sectors and indexes on the report. It really is that simple. The best feature of all is that the report is designed to allow you to create your own unique portfolio and it gives you all the tools you need. You can follow an upgrading process on many different types of sectors or asset classes as our ranking report is broken out by asset class categories, and offers an intuitive and easy to use system.

As sector rankings in the Sector Timing Report change over the month, simply rebalance your portfolio by selling sectors that have dropped in ranking and replace them with the new leaders on the report.

Staying on top of the markets with the Sector Timing Report only requires a couple of minutes each month to check-in with the new sector rankings.

Is Buy and Hold Officially Dead?

Although Buy-and-Hold strategies do not work well over a long-term contraction cycle, or even in a sideways cycle, there are other core strategies that will work just fine.

In fact, these strategies will work in UP, DOWN, or SIDEWAYS markets if you pay close attention to the trends and cycles within the sectors of the markets you are trading.