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Strategies & Market Trends : Ask DrBob -- Ignore unavailable to you. Want to Upgrade?

To: jpdunwell who wrote (28600)	3/24/2001 8:55:07 PM
From: the-phoenix	Read Replies (1) \| Respond to of 100058

To burgermeister and jpdunwell: Glad that you found my post on trading the 13 week moving average useful. As I stated in the original post, this was not an "optimized" system - I literally made it up on the spot to demonstrate the power of even very simple TA and "market timing" to improve returns. I wasn't aware that it would have produced 400% higher returns that buy and hold on the Nasdaq, even through the greatest bull market of all time. So what is the big deal about some mutual fund hotshot that beats the market by a few points a year? Is he/she worth millions in compensation a year? What a joke. However, you both indicated something to the effect that it "was easier to do on paper than for real" and might not be suitable "for those with limited time, and (wanting) less hassle". I submit that I think nothing could be easier. Here is what you do: You only need two trading vehicles accessible to your account - one that mirrors the market of your choice (let's use the Naz) and a fixed return instrument. For the latter, any no-load no-fee garden variety money market fund will do. For the former, either a no-load Nas Index fund, or an Exchange Traded Fund like the QQQ (Nasdaq 100 Tracking Stock.) Every weekend, you spend five minutes glancing at this chart. The one criterion is did the market close above or below the moving average. If it is above, you are in the Index Fund. If below, you are in the money market fund. On the rare weeks that a crossover occurs, you place a trade with your broker for the following Monday morning's open to move your funds from one vehicle to the other. There. You just beat buy and hold by 400% over the last 15+ years. Oh, you have a few transaction fees and some capital gains issues, but wouldn't it be worth it? (BTW - how much are you paying in "management fees" to have someone else trade your money and produce returns that are a fraction of these?) Thanks for resurrecting this little "system" and providing the backtesting results. Phoenix