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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host -- Ignore unavailable to you. Want to Upgrade?

To: Boca_PETE who wrote (2822)	1/15/1998 7:38:00 PM
From: sea_biscuit	Read Replies (2) \| Respond to of 42834

It appears that the measurement is unfairly taken right at the peak of that parabolic rise before the crash. Interesting comparison, but how meaningful is it ? I think it is pregnant with meaning! And I also think it is absolutely fair. After all, the name of the newsletter is Marketimer! Ain't it? Interestingly enough, the totally passive indexed approach that is advocated in Chapters 12 and 13 of the book at fee-only-advisor.com would have produced 9.94% annualized returns (assuming an effective annual expense ratio of 1.0%) for a 40% bond, 60% stock portfolio from 1987 to 1994 (I don't have the numbers for 95 and 96, but if we had them, I am pretty sure it would look even better). Make it a 100% stock portfolio and the returns would rise to 12.29% Dipy.

To: Boca_PETE who wrote (2822)	1/16/1998 1:10:00 AM
From: mister topes	Respond to of 42834

You have hit the nail on the head with your analysis. By arbitrarily selecting the August 1987 peak the numbers are skewed toward a negative result. For example, all of the gains in the 1987 updraft from January to August, which were very large, are eliminated in this study when the arbitrary peak price point in August is selected as the starting point. The true numbers are reflected in the Marketimer performance figures which show compound annual returns of 13.5%, and 14% for Models I and II over ten years ending 1997 and 11.2% for Model III over eight year life of portfolio which only has 50% of assets exposed to the stock market. Timer Digest currently ranks Marketimer timing second in the country over the past two years with a total return of 57.5% based on the Vanguard Index 500.