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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Shane M who wrote (40608)	12/15/2010 12:12:19 AM
From: Mark Marcellus	Read Replies (1) \| Respond to of 78774

It would be interesting to see a study that compares returns (before tax) on a 4 week turnover vs. a 1 year turnover. My gut says that one year would work better, but I've got nothing to back that up with other than my gut. In my experience, value plays usually take longer than 4 weeks to play out. Also, they often don't stop moving up once they break out of value territory - you can lose a lot of momentum if you sell them after four weeks. The big question on a 4 week cycle is what do you do with stocks that remain on the list after four weeks? Do you automatically hold them and rebalance, or if not how do you decide whether to hold or kick them out? This actually comes up often enough over a 12 month cycle (and according to the MF FAQ, the decision on this one is completely up to you), but I suspect it's an even bigger factor in a four week cycle. It's a double edged sword. If you automatically sell after four weeks, you'll avoid the value traps but it means you'll miss the ones that you haven't timed more or less perfectly. If you automatically hold, you are going to cling to value traps but potentially miss a lot of up side on the ones that turn into momentum stocks.