Posts Tagged ‘Market’
The Market Cycle Investment Management (MCIM) Program
The Market Cycle Investment Management (MCIM) Program
During the past sixty years, most economic, market, and interest rate cycles have lasted from two to five years, peak-to-peak. Rarely have any of the cycle-tracking market indices moved in tandem, and none of the cycles are considered to be particularly predictable.
Individual securities (the stuff that indices are made of) complicate things significantly by having even less predictable cycles of their own. This generally uncertain atmosphere is the very nature of the financial markets. If investors could come to grips with the non-calendar, cyclical, nature of markets, it is likely that they could improve their investment performance considerably.
In spite of decades of irrefutable evidence to the contrary, Wall Street has convinced most investors and far too many financial professionals that the calendar year is somehow investment relevant. Simple, yes; tax-code friendly, perhaps; but investment realistic— not.
Too many experts have abandoned the financial world’s fascinating cyclical undulations for the simplicity of the planet’s annual orbit around the sun. It’s time for a change in direction— one that doesn’t ignore the realities of the investment markets. It’s time to get back on our “hogs”, and ride!
Regardless of direction, all cyclical movements have proven to be excellent investment opportunities for Market Cycle Investment Management (MCIM) navigators. The MCIM Program uses a time-proven methodology that befriends market and interest rate cycles by using strategies that most often should produce:
* Higher market value lows during market downturns.
* Moves to cash before corrections take over from rallies.
* Maintenance of planned income during financial crises.
* Faster movement to new market value highs.
* Steady growth in “working capital” in all market environments.
* Annual growth of realized “base income” in all portfolios.
* No major disappearing (unrealized) profits.
* Much better than average peak-to-peak market value numbers.
* Auto pilot maintenance of asset allocation structure.
* Reduction of analysis paralysis, appreciation of both rallies and corrections, and love of market volatility.
The past twelve years have included two major market cycles and one significant economic crisis. Email me to see how well Market Cycle Investment Management accounts fared during this interesting segment of financial history. Read “Brainwashing the American Investor” to appreciate the MCIM program— in operation since 1970.
All investors should become familiar with Market Cycle Investment Management accounts and the strategies they employ to keep portfolios on track from start up to retirement. As a family evolves over time, separately managed, “life cycle” friendly, portfolios will become necessary. For example:
Group One -Taxable income and Investment Grade Value Stock (IGVSI) portfolios for tax deferred accounts
* 70% IGVSI Equities and 30% Taxable CEFs
* 50% IGVSI Equities and 50% Taxable CEFs
* 30% IGVSI Equities and 70% Taxable CEFs
Group Two – Tax free income and Investment Grade Value Stock (IGVSI) portfolios for taxable accounts
* 70% IGVSI Equities and 30% Tax Free CEFs
* 50% IGVSI Equities and 50% Tax Free CEFs
* 30% IGVSI Equities and 70% Tax Free CEFs
Group Three – Tax managed portfolios, asset allocated as in Group Two, for taxable accounts.
Notes: (1) Group One and Two portfolios would be managed in accordance with The Working Capital Model, as documented profusely in the books and articles of Investment Manager Steve Selengut. (2) Group Three portfolios would be managed similarly; however, tax loss selling will be used annually to offset a significant portion of trading gains.
Reasonable Expectations: (1) Portfolios should lose less market value during market corrections and recover to new highs more quickly. (2) Profit taking during rallies, regular cash flow, and strict stock purchase rules should produce quicker recoveries. (3) Income production from equities, combined with a significant income securities bucket, assure annual increases in “base income” levels.
Market Cycle Investment Management replaces the racetrack mentality that runs today’s investment performance evaluation methodologies with a calmer, more cerebral, strategy.
By looking at things cyclically, and analytically, instead of celestially and emotionally, we allow our strategy to prove itself over a reasonable period of time— as it has since 1970.
If the investment strategy makes sense in the long run, why knock yourself out in months, quarters, and years? Pick the MCIM program or programs that suit you best today and let them work you through the cycles the investment gods are preparing for your future.
Attend a seminar, adopt the program, and smile.
Steve Selengut
http://www.kiawahgolfinvestmentseminars.net
Professional Portfolio Management since 1979
Author of: “The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read”, and “A Millionaire’s Secret Investment Strategy”
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Stock Market Investing- 8 Rules to Your Investing Success
Stock Market Investing- 8 Rules to Your Investing Success
8 Rules for successful Forex trading
If you want to succeed in Forex, you need to experience what your doing and do it right. This is not like going up on a bike and starting to cycle. It’s more like get in the driver’s seat of a motorcar with an teacher at her side, help them understand the rules of the road while moving safely through the traffic. successful traders live by the ‘road rules and avoid heading in the wrong way for access to the examples of the past, sometimes yes, sometimes more.
When you get a chance to go to a seminar where the success of Forex traders are talking about, jump on the opportunity to learn all the details on what led to their succeeder. Meanwhile, follow these guidelines to get the engine and mind into the busy road of exchange operations.
1. Advice. In That Respect are thousands of people who have gone before and not so much the succeeder or seen a amount of both. Read books, collect information, the formation of free trial. The more you know and understand about the foreign exchange, the better their potential for success.
2. Not enticed to trade more than they can afford. Forex is dangerous and even the most seen brokers and traders may have unforeseen losses. The main trouble is not going beyond their means and then risk turning a loss the money needed for life, either now or in the future.
3. It is not used outsmart the market. Interpreting and forecasting of trends in the movement is something that even the professionals and had to spend years, if not decades, fathoming. Always sell to markets that are not performing and which are signs of weakness. Trying to be intuitive and make rash predictions only lose money.
4. I understand that in world is just a game. It may seem like a wrong comment, but it is necessary to obtain results that are not too serious. Considering that the next one million dollars because the man has only one triumph, and feelings can lead to more skills that you become the next Pedro Pinch cent. Have the high and low trying to avoid.
5. Draft victory away. Whatever happens in the short term must be good for the long term. Low may help you understand where it has failed, while high can help you determine what to duplicate next season. Trading in the Forex
market, you will see a multitude of changes in the market on a daily basis. What really matters is the long-term results. You must keep Chipping away from them and reinvesting its “champion” toward greater succeeder.
6. Ending loss positions. Not continually throw money into a hard trade is expected to improve. Probably not. experience out while you can. Are you sure you lose money, but the loss of “some” is better than losing everything.
7. Be controlled. When you finish your homework, stick to your system. Do not try to outdo yourself for being cocky and throwing more money into the market and just watch closely.
8. Keep a cool brain during services. Before making a transaction, you use and the assessment to decide what to do.
When trading begins, it may be attractive to include the flow of adrenaline and do more than what was planned. Stick to the plan and avoid trying to do under pressure. If you participate in exchange operations and see that it is not for you, but persevere is keep awake at night. Market volatility in foreign exchange trading can be so intense that it could send a dizzying. Note that There are other forms of trade that is not so involving her immediate attention.
Now that you have the rules you will need to find a great broker so feel free to contact us for the CFD FX REPORTor email us at support@cfdfxreport.com
CFD FX Report www.cfdfxreport.com is a real time tool for clients with an interest in the trading of stocks, indices and commodities globally.CFDs (Contracts For Differences) are one of the worlds’ fastest growing trading instruments that allows clients to profit from a rising and falling market. The CFD FX Report is a company comprising of expert traders that analyse the market daily and are able to make recommendations for the following day trades based on this analysis. The CFD FX Report is released everyday at 6.30 p.m. (Singapore time) for review by the clients for the next trading day.
We provide sms
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Welcome to the Stock Market: A seemingly complicated topic explained in commonsense terms
Welcome to the Stock Market: A seemingly complicated topic explained in commonsense terms
Welcome to the Stock Market: A seemingly complicated topic explained in commonsense terms
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Home Page > Finance > Investing > Welcome to the Stock Market: A seemingly complicated topic explained in commonsense terms
Welcome to the Stock Market: A seemingly complicated topic explained in commonsense terms
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If you’re one of these people who say or think that you don’t know anything about the stock market – prepare to be surprised.
You say you’re not interested in the markets because you’re afraid of losing money. You say that only professionals can make money in the markets and that you can only make money in the stock market if you have money to invest in the first place. I assure you – nothing is further from the truth.
The fact of the matter is, whether you like it or not, you are already a part of the stock market.
Believe it or not, every time you buy something, say an iPod, you are making money for a corporation, such as Apple. Whenever you buy a box of Kleenex, you are making the Kimberly-Clark Corporation just a tad richer. Whenever you steal the transmission out of a Corolla, you are making money for Toyota (since the owner has to get the engine replaced, courtesy of Toyota). I can go on, but is there a point?
Now, let me ask you: if you like a company’s product, why not buy some shares of that company? If you are making the corporation richer by buying their products, why not be a part of that company?
Is it possibly because you have never thought about it that way before or you simply didn’t know these options were available to you? Or maybe you just don’t understand the concept of shares and ownership of stock; maybe you don’t even know what a stock is?
Well, it’s okay and it’s nothing to be embarrassed about. It’s my job (and that of BigFatMoneybags.com) to open this world up to you and show you the opportunities that exist in the stock market. Now let’s get started!
INTRODUCING THE STOCK MARKET!
The stock market is quite possibly the most magical place in the world to make money, second only to my rope selling business during suicide season. If there exists a place on this earth where you can take an initial investment large enough to buy a set of pots (or pans, whichever floats your boat) and turn it into enough to buy a duplex and a windmill to boot – it is the stock market.
Problem is, people either don’t understand what the stock market is or they don’t see the potential in it or they simply think it’s all a hoax. The technical term these types of people are classified under is: imbecile.
It seems that people don’t understand how you can take an initial investment of ,000 and turn it into ,000 (if you have somewhat decent stock-picking skills) or turn it into ,000 (if you don’t) a year later. To understand how that is done you have to understand how the stock market works – which is what I will proceed to do right about…now.
The Stock Market Explained
You’ve probably heard some stupidly ecstatic talking head on TV screaming “Sell the children! The Dow has fallen 20 points!” or “Praise Jesus! The NASDAQ is up 112 points! Hallelujah!” Those words probably didn’t mean much to you in the past, but after reading and absorbing the knowledge in this article you will quickly understand what it all means and will be smarter than 99% of Wall Street, congratulations!
Before I go into explaining what the Dow or NASDAQ is, it will probably help to understand what a stock is in the first place:
A stock represents ownership of a company’s assets and profits and conversely in its liabilities and losses. A share represents how much ownership you hold of that company. Yes, it’s that simple.
You can purchase virtually any (major) company’s stock. Common examples are Apple (AAPL), Google (GOOG), Best Buy (BBY) and Nike (NKE) as well as any of the stocks found in The Gutman Fund. Those strange little abbreviations that look suspiciously like an alien language is actually how the stock is classified and is referred to as a “ticker” or a “stock symbol”.
If you’re so confused right now that you feel like hanging yourself with that rope you purchased from me, put it away; I will ease your spinning head with a little example:
The story of RICH
Let’s conjure up an interesting little company called Mr. Moneybag’s Rope Selling Emporium (Symbol: RICH). Currently, this company is a private corporation (meaning shares of this company cannot be bought and sold in the open markets) but to raise some extra dough Mr. Moneybag decides to “go public” meaning his company’s shares can be bought and sold in a stock exchange – this is what is referred to as an Initial Public Offering (IPO).
Mr. Moneybags drives on over to his investment banker and after many hours of screaming and obscene hand gestures they determine that the company is worth billion. It turns out that Mr. Moneybags is a greedy little chimp and decides he wants to sell off the entire billion and take home the cash all to himself – problem is that not many people can afford to go out and spend billion everyday (unless of course you are a Gutman). That’s why they have to take that number and cut it into smaller, more affordable pieces – known as shares.
Mr. Moneybags decides he wants everyone and their pet horse to be able to afford shares in his company, so he sets the price per share to be 0. Since the company itself is worth billion, that means there are 200 million shares at 0 a pop (0 x 200 million = billion).
In real life, the investment banks and whoever else took part in the IPO would take a percentage of these funds, but for simplicity’s sake let’s pretend all these organizations were feeling Christmassy.
Problem is, finding a buyer for every tiny little share can take longer than it takes a hundred-and-seven year-old lady to back out of her driveway. That’s why stock exchanges exist – so, instead of going out and asking Aunt Erma to buy some stock in your rope-selling business, you can refer to a stock exchange which will electronically connect buyers and sellers without any hassle on your part. [Some of the stock exchanges you commonly hear on the news everyday: New York Stock Exchange (NYSE), NASDAQ and the Toronto Stock Exchange (TSX)]
Buying and selling shares on a stock exchange used to be done by stock brokers but nowadays with the advent of that contraption commonly referred to as the internet, online brokerages are all the rage now. The process of buying and selling shares of a stock is done within seconds. (More on this and choosing online brokerages later)
And thus, Mr. Moneybag’s company was sold off bit by bit in a pretty short amount of time (honestly, how can someone not want a piece of a company like that?).
It’s important to remember that when a company sells its soul in an Initial Public Offering, a Board of Directors is elected by the owners in order to manage the day-to-day operations of the company. It’s also good to know that ANYONE, literally ANYONE can trade stock – all you need is some money, a bank account and to be a human being.
And that is the story of how Mr. Moneybags made billion in one day.
How the price of a stock is determined
So now you know what a stock is and how shares of stock are bought and sold. What I still didn’t explain is how you can take an initial investment of a few thousand dollars and turn it into many thousands of dollars or lose almost all of it.
The only way you can make money in the markets and take your initial investment and turn it many times more is by buying low and selling high. If you know anything – literally anything – about stocks, you know that their share price always fluctuates.
An example of buying low and selling high? You buy one hundred shares of a company at a share, meaning your initial investment is a grand total of 00 ( x 100 shares). A year later each share is worth , meaning you can sell your one hundred shares for 00 ( x 100 shares) – a tidy profit of 50%. Question is, why does the price of each stock change and how can you use that to your advantage?
The reason that stock prices jump around as much as a rabid kangaroo infected with rabies is due to the wonderful market forces known as supply and demand. As simply as it gets:
When the demand for a certain stock is higher than the supply available, the price per share of the stock will rise. Since everyone wants a piece of the pie and there’s not enough of that delicious pie to go around, people are willing to pay a little bit more for every piece, thus the price per share rises.
When the supply of shares for a certain stock is higher than the demand (meaning there is low demand), the price per share of the stock falls. Say, Aunt Erma accidentally used insecticide instead of sugar and the only way people can sell their slices is by cutting the price, hence the price per share falls.
That having been said, there is also the case of what actually determines the demand of a stock. We know that the supply is determined by the amount of shares available to be purchased, but what factors lie behind demand?
The main reason investors are willing to pay more or less for a stock is because of what they think the stock is worth. If they believe the stock is worth more than its current price, they will pay a higher value for it. On the other hand, if the investor believes the stock is worth less, they will sell the stock if they own it or they will wait for the price of the stock to drop so they can buy at a price they deem suitable.
NEVER associate a company’s stock price with its value (how much it is actually worth – also known as a stock’s intrinsic value).
As I said earlier, you want to buy low and sell high – the only way you are going to do this effectively is by buying a stock that is worth one dollar for fifty, thirty or even ten cents and then sell it when it reaches its intrinsic value. Remember, just because a stock is trading at gargantuan levels, doesn’t mean it’s actually worth that much.
The problem is, determining how much a stock is actually worth is where everything gets a little tricky. I’m not going to go into too much detail about that in this article as valuating stocks is slightly more advanced than the scope of this article – if you would more about the hardcore stock valuating skills (you know, the ones that make you all the money) then head over to my website, which you can find a link to in the bottom of this article.
Factors Affecting the Perceived Value of a Stock
The most common factor affecting how investors’ perceive the value of a company is by its earnings. If you don’t know what earnings are (really?): they are the profits a company makes (commonly referred to as “the bottom line”).
So, if a company doesn’t make any money, it’s doubtful it will stay in business – thus the perceived value of the company falls.
Investors, and the inbred mules on Wall Street, watch earnings reports like hawks. If a company reports better than expected earnings, they will pile into the company, thus demand rises. If the results are worse than expected, expect the price to plummet. And since companies are required to report their earnings four times a year (every three months – referred to as a “quarter”), you can bet that there will be many occasions for stocks to swing back and forth like a wild monkey on a swing.
Other reasons the price of a stock will rise revolve around good news such as analyst upgrades, management restructuring or due to speculation, such as rumours of a larger company buying your company out.
Over a longer period of time, the price per share of a company will rise as the company grows and becomes more and more profitable (remember, if you own shares of a company you own a share of the profits).
Common reasons a stock will fall in price? The exact opposite of the last paragraphs: bad news regarding the company as well as analyst downgrades are some examples of why stocks fluctuate in price.
If learning about all this seems daunting to you or you are thinking that this information is only available to insiders (employees of companies), there is a good chance you are poor. The beauty of the stock market is that it is built to be fair for everyone (or at least is supposed to be), meaning that you have access to the same information as any insider. So now you don’t have any excuses for not being rich, sorry.
The Tale of Risk
Of course, when you invest in the stock market there is always some element of risk involved. Then again, whenever you engage in any activity there is some element of risk involved, for instance when you are riding your bike to class there is a chance of you hitting a bump and, long story short, end up with bits of your head all over the road. There is even risk when you are reading a book: those sharp corners plus your eyes can equal an unpleasant trip to the hospital.
That’s why you should wear a helmet when you go biking or wrap your books in foam when you are reading in order to mitigate your risk as much as possible.
Of course there are many people who choose not to be prepared with a helmet handy for when they have their lives flashing before their eyes as they are falling off their bike head-first into the concrete in slow motion.
Granted, a very small portion of people end up with pieces of their heads missing when they go biking so it would make sense for them not to want to wear those clunky helmets. Then there are the bikers who bike down the middle of the road while keying cars and running over koala bears. For these types of reckless people, a helmet would be a good idea, yet many still don’t wear one.
This analogy of bikers and risk applies directly to investing. As there are different types of bikers there are different types of investors. Some choose to be safe and take necessary precautions in order to avoid having to sell their organs in order to pay off the bills (equivalent to wearing a helmet while biking) while others are too busy recklessly investing without doing a smidge of research and thus end up not noticing the wall they are about to collide into…head-first…with no helmet…while riding their bicycles and losing all their money. Karma is sweet.
I can go on talking about bicycles, pieces of head all over the ground and throw in a random reference to investing every now and then but I think you get the idea.
There are many investment strategies that will reduce the risk that comes with any investment such as dollar cost averaging, diversification, asset allocation or even investing in mutual funds. Again, I do not want to get too technical in this article so if you are interested in all of the investment strategies available to you then head over to my website which will be linked to at the end of this article.
All you really have to remember about stocks and risk is that the fastest growing stocks tend to be the ones that are the safest. Many people will launch boulders and packs of man-eating Rottweilers at me for saying what I just said, but then again doesn’t it make sense that the more people are buying of something, the better the quality?
There’s a reason Apple sells iPods by the pound while its stock price went from to 0 and why Amazon is considered to be the next of kin to Jesus – and I dare anyone to tell me these stocks were “risky”. There are thousands of other such examples, but I’m too lazy to list them all.
And as for the people who say that investing in the stock market is the same thing as gambling? I’m not even going to dignify that with a response.
Some More Things to Consider
Stock Indexes
If you watch the news you will constantly hear newscasters screaming hysterically about some strange contraption known as the “Dow”.
When they refer to the “Dow” they are referring to the Dow Jones Industrial Average, a stock market index. The point of this index is to represent the state of the stock market as a whole; whether it does so effectively or not is a topic for a completely different article.
The Dow Jones Industrial Average is simply the average of thirty “blue-chip” stocks such as IBM, General Motors, McDonald’s and Microsoft. These companies are big, bulky, well-established and are considered to be rather dandy representatives of their sectors.
If the Dow rises in value, it is considered that the economy is doing well; if its value falls, it’s considered that the economy is not doing so well.
Other stock market indexes are the S&P500 and the Russell 2000, although the Dow is the index that is most closely followed.
Dividends
Dividends are one of the ways a company distributes its earnings to shareholders. They take the form of cash, stock or even property. The amount of the dividend is determined by the board of directors; the more shares you own, the more dividends you get.
Also, high-growth companies (the kind of companies I like) tend to reinvest their earnings in order to sustain their super growth instead of giving their money away to shareholders, this results in the price per share rising.
Another reason I don’t like dividends is due to tax reasons. Just remember: you have to pay tax on dividends and paying tax means you make less money.
Different Types of Stock
There are also different types of stocks. The ones that I constantly refer to are “common stock” and is the type that most people refer to when they are discussing stocks.
There is also “Preferred Stock” as well as different classes of stock, such as “Class A” and “Class B”. I’d tell you more about these types of stocks…but there’s no point. Stick to common stock, that’s where the money is.
Different Types of Markets
When everything is fine and dandy and stock prices are rising in price while everyone is making money – it is referred to as a “Bull Market”.
When people are stockpiling food reserves, selling their kidneys to black market organ dealers, haggling their kids away for pocket change and when stock prices are falling – it is considered a “Bear Market”.
So now when you hear people using these terms, you won’t feel all that helpless anymore…maybe even on their level…or better yet, more powerful…powerful enough to crush their skulls into dust…and to conquer the world…with a flick of your finger.
Yes, the stock market can do that for you.
In Closing
Congratulations, now you know how the stock market works! With this knowledge alone you can go out and make greater returns off of the stock market than most “professionals” ever dreamed of making.
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Mr. Moneybags -
About the Author:
Mr. Moneybags is the richest being in the universe to ever have existed and ever to exist. He writes about building wealth in the stock market, business and personal finance on his blog and is determined to prove that the subject of money shouldn’t make you want to douse yourself in gasoline and run into a forest fire.
You can find more of his amazing articles on his blog at http://www.BigFatMoneybags.com
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Nov 13, 2009
The Not-So Secret Power of Compound Interest
Did you ever sit there and just wonder how did the richest people in the world get that way? The answer is by making their money work for them – commonly referred to as compound interest. This article will explain to you the magical power of compounded interest and how you can make this magical thing work for you. So, what are you waiting for? Get reading!
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Mr. Moneybagsl
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Nov 13, 2009
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Mr. Moneybags is the richest being in the universe to ever have existed and ever to exist. He writes about building wealth in the stock market, business and personal finance on his blog and is determined to prove that the subject of money shouldn’t make you want to douse yourself in gasoline and run into a forest fire.
You can find more of his amazing articles on his blog at http://www.BigFatMoneybags.com
A Look at the Wide Range of Youth Cycling Apparel That Serves the Market
A Look at the Wide Range of Youth Cycling Apparel That Serves the Market
Cycling is a sport for all ages, and you don’t have to be a pro to go for a thrilling ride on a weekend afternoon. Children and young people are very excited about cycling, and all you need to do is simply take a look at the wide range of youth cycling apparel that serves the market in order to understand the extent and the importance of this pass time. Uni-sex clothing items in the most appealing of colors, with great designs and matching imprints make the true delight of children and youngsters who can be both trendy and comfortable at the same time.
Any parent would want to make sure that the youth cycling apparel his or her kids are wearing are high quality and easy to carry even in a school bag. Short or long-sleeved shirts with lots of functional details and concealed zippers are both fashionable and very practical. For youth cycling apparel especially designed for the cold periods, fleece jackets are among the most popular; why is the clothes fabric so important in cycling? Well, the answer is very simple, for health purposes any apparel item needs to allow a good skin breathing; though a synthetic material, fleece allows the evaporation of perspiration without favoring tissue cooling.
Maximum comfort and great performance is the logo under which many companies that produce youth cycling apparel launch their collections; you can “leaf” the online catalogs to make an idea of what the relationship price quality-implies for the matter. Always make sure that the material the youth cycling apparel pieces are made of meets the quality requirements for easy moisture transportation so that the skin of your little bikers remains dry all the time. Also keep in mind the fact that unless this sport is practiced for high performance purposes, youth cycling apparel is available for almost all budgets, and you can find quality products even if they are not international brand names.
Youth cycling apparel can very well match with the attire for rest of the family members particularly if bike riding is part of your common activities. You can find very interesting sets designed by Inverse or Santini that combine quality with price accessibility too. Don’t forget to combine the youth cycling apparel with other gear elements that help one improve training and achieve good performance levels. Once you start using great products you will definitely feel the difference!
Market Cycle Investment Management
Market Cycle Investment Management
Whatever happened to the Stock Market Cycle; the Interest Rate Cycle; Baby Jane? How did Wall Street get away with pushing these facts of financial life down the basement stairs? Most investors, I’m beginning to believe, and all financial advisors, media representatives, and market gurus have abandoned these fascinating curves for the comfort of a straight-edged twelve-month playing field… simple, yes; realistic, not. I have to wonder if things would be different with a more investor-friendly tax-code, but that would be far less lucrative for The Wizards…
Investing with a calendar year focus has no basis in the realities of finance, business, or economics… isn’t it obvious that the Stock and Bond Markets are far more closely related to the Business Cycle than to the Earth’s around the Sun? Investopedia reports that, during the last sixty years, most business cycles have lasted three to five years from peak-to-peak. The Stock Market Cycle (in terms of the S & P 500 Average) is the period of time between the two latest highs of that average which are separated by at least a 15% decline in the average. The second high needs only to be 15% above the nadir, it doesn’t have to represent a new All Time High (ATH). Interest rates (based on the 10 Year Treasury Bond), seem to cycle in the two to five year range, and are much more closely related to Business or Economic cycles than they are to the Stock Market Cycle. Confused?
Well, you should be. Although they are closely intertwined, none of these financial realities are predictable and, therefore, need to be dealt with as hindsightful tools in the performance analysis process… a process that needs to be undertaken using personalized expectations. How many times in the last 20 years do you think that any of these cycles peaked on a December 31st? The “I’ll try this approach for a year or so and then change if it doesn’t work out better than everything else” mentality, combined with a regressive tax code that rewards losses more than gains, has killed cyclical analysis dead. It’s time to get back on our hogs and try something old. Let’s re-cycle peak-to-peak analysis like we do plastics and paper products. It might just put more “green” in our retirement programs. As recently as 1980, Separate Account (the first Mutual Funds) Investment Managers were reporting fund performance in terms of income generation and peak-to-peak growth in Market Value. But that was before investing became the number-two spectator sport in America.
Few investment professionals would argue with the observation that a viable investment program begins with the development of a realistic plan, and most would agree that investment planning requires the identification of long-term personal goals and objectives. Some experts would even agree that the end result should be a near autopilot, long-term and increasing, retirement income. Asset Allocation is used to organize and control the structure of the portfolio so that it operates in a goal directed manner. Is this easy or what! It would be if the average investor would just let things alone long enough for them to work out according to the plan. That’s the rub. Wall Street, the financial media, and financial professionals (including CPAs) have no interest in letting things work out according to plan… even if it’s a plan that they designed.
Is it clear that calendar year performance evaluation allows an average of just six months for an equity selection to ‘perform’? Is it clear that the change in Market Value of an income security over the course of a year is meaningless? Is it clear that a portfolio containing both types of securities cannot be compared with an average or index that is comprised of just one or the other? It is crystal clear until it’s your portfolio that has had the audacity to shrink in Market Value over the course of the year! Human nature is predictable but not necessarily rational. Mother Nature’s financial twin’s twisted sense of humor, though, is both… and totally unrelated to third rock movements.
If the change in a portfolio’s Market Value is really so important (the Working Capital Model would argue that it is not), why not do it over a period of time that recognizes where we happen to be, cyclically? Interest Rates have cycled seven or eight times over the past twenty-five years; the stock market has been nearly twice as volatile. Peak-to-peak analysis, although hindsightful, raises a type of question that can, at least, be portfolio personalized for analysis:
(1) Did my Equity portfolio grow in Market Value between January 2000 and January of 2002, or between January 2002 and either January 2004 or June of 2006? These were cycles on the DJIA, which at its high in June 2006, was still below the ATH established in early 2000. These are meaningful time periods that can be used to study the effectiveness of various equity-only portfolio strategies. S & P 500 cycles were pretty much the same.
(2) Does my Income Portfolio generate more income today than it did the last time interest rates were at these levels is still the most important question that should be raised… regardless of Market Value. Sorry.
But as important as it may be to determine the answers to such questions, it is equally important to understand why the results were what they were. Did I withdraw money from the portfolio, or take losses on investment grade securities for tax reasons? Did I fail to follow the plan, or lose control of my Asset Allocation? Did I change variable expenses into fixed expenses or allow tax considerations to keep me from realizing profits. Were there changes in the investment markets that would make peak-to-peak analysis less meaningful than in the past?
So by taking away the move-your-money, racetrack, mentality that runs today’s investment performance evaluation methodologies, we create a calmer, more cerebral, management exercise with which to tweak our investment strategy. We may have gone backwards because we stayed on the sidelines instead of buying when prices were low. It may have been the strategy, it may have been the management, it could have been the diversification formula, or the buy-sell-hold decision-making rules. It may even have been the fear or greed that influenced our judgment. By looking at things cyclically, and analytically, instead of celestially and emotionally, we either allow our strategy to prove itself over a reasonable period of time or obtain the information needed to change it constructively.
The recent popularity of Index ETFs has detracted from the usefulness of both the popular market averages and the most useful market statistics. Issue Breadth, 52-week High and Low, Most Actives, Most Advanced, and Most Declined figures now include thousands of these hybrid and derivative securities. A bigger problem is the artificial demand created for index-included securities, a demand unrelated to corporate financial statement fundamentals. Another problem for Investment Grade Value Stock only investors is the absence of a well-recognized average or index to use for analysis… the IGVSI and related Market Stats should help.
Analyze this: if the strategy makes sense in the long run, why knock yourself out in months, quarters, and years? Where have all the cycles gone…
A Look at the Different Varieties of Street Bmx in the Market
A Look at the Different Varieties of Street Bmx in the Market
Street BMX bikes are designed for free style riding. The style and performance of these bikes will be more attractive to speed lovers. Dawes Street BMX has been designed with oversize steel; frame. It has 20 inch alloy rim and steel nutted hubs. The V style brakes are used here. The free style stem allows easy and tricky street ride. It has front and rear stunt pegs. The tough wheels provide maximum grips while performing tricks.
Street BMX bikes offer top quality performance. There are numerous brands in street BMX bikes. You can select anyone according to your age and preference.
Mongoose Menace street BMX bikes: The frame is designed with full Hi-ten. Cromo steerer fork is being used in this bike. Mongoose alloy platform pedals are used. Alloy rims are designed to provide long lasting performance. The spokes are made up of USP steel. Alloy U style brakes are used here. Mongoose krayton grips and Mongoose jumper saddles are offering more quality in performance. Stainless steel seat posts are used to give light weight and durable seats. A pair of pegs will be provided with this. The color of this bike is mint.
Mongoose expert street bikes: These bikes have full chromo frame and Pedals are Mongoose M alloy pedals. Spokes are made up of black steel. The tektro alloy u style brakes are used here.
Mongoose brawler BMX bikes: They have full chromoly tube frame. It has Alex rims and Kenda tires. It has set of three cranks and pair of primo grips. It has mongoose alloy pedals. It comes in lovely colors.
Motivator Mini: It has a compact junior trail frame design. The wheels are tough and Mongoose Dirt tires are used here. Mongoose resin platform pedals are used to provide maximum grips in street riding. Spokes are made up of stainless steel.
Motivator FW: This street BMX is available in handy red color. Full Hi-ten frame design is made here. It is suitable for junior riders. The handle bars and Rims are made up of alloy. The dirt tires are used here so that the rider can perform tricks without losing grip.
BTwin Street dirt bikes: Race RC pro XL BMX is suitable for all BMX racers. It has a carbon fork and aluminum steerer. It has oversized aluminum stem to grant sturdiness. It has aluminum pedals and Tektro V style rear brakes. It is more useful for fun lovers. It is safe and reliable. However, it is not suitable for skate park riding.
Race RC 5.1 Pro XL BMX is for riders from 12 to 15 years of age. It has protective foam pads. It is suitable for pro races. It has durable aluminum pedals and the rear V shaped brakes are used. It is efficient and safe for junior riders.
Race RC 3.1 mini is specially designed for young riders from 3 to 6 years of age. The full chromoly frame design provides maximum sturdiness. The protective foam pads prevent the riders from getting injuries. It has aluminum chain set and pedals. It is also strictly not suitable for skate park riding.
There are many varieties of BMX bikes that you may choose. You can select any of them that suits your age from online stores or from authorized dealers.
Understanding Market Cycles – the Key to Successful Investing
Understanding Market Cycles – the Key to Successful Investing
How many times have you bought a stock, bond, or mutual fund – just when the fundamentals sounded great – only to see that investment go into a protracted decline? The key to any successful strategy is buy low and sell high. But a successful implementation of that strategy requires an in-depth understanding of market cycles. “The knowledge and exploitation of cycles embodies one of the most powerful analytical tools available for identifying trends and forecasting their reversals” notes Stan Harley, editor/publisher of The Harley Market Letter. “I have long recognized that the study of market cycles is the key factor in understanding how markets move” observes Harley. Cycles provide the essential algorithm in predicting how long a trend should run and when to expect reversals. Studying the chart history of a stock or index will reveal that there are, indeed, rhythmical beats that define the up and down market movements. But, like any stream of data comprising a solution set, the time period between cyclical occurrences will vary from beat to beat. At times a high occurs where a low is expected. And not every projected cyclical turn results in a market reversal of importance. At other times, the larger, more-dominant trend will be so strong that the shorter-term cycles will seemingly disappear or skip a beat. A 50 percent phase shift either forward or backward is not uncommon at times either. All of these peculiarities present frustration to many traders and investors looking for the “holy-grail.” Investors should recognize that these windows of times are ones to monitor for the potential – but not the certainty – for a cyclical trend change to occur.
Cyclical analysis is a top-down approach Harley advises. Identify the longest dominant cycle, then work down to the smallest cycle affecting price activity. Most cycles have subcycles embedded within them, usually two or three, which Harley refers to as the alpha, bravo, and charlie components. When a particular cycle is nearing its trough, it will tend to dominate the shorter cycles which comprise it, causing them to contract or expand beyond their usual frequency schedule.
Harley defines three essential elements required in cyclical analysis. The first element requires an awareness of the numerology underlying the derivation in market cycles. Most market cycles have their roots grounded in fibonacci numerology Harley has found. The second element requires that the analyst employ statistical analysis to verify the numerology premise and provide mathematical organization (computation of the central tendency and its variation) to the data under study. The third element involves the development of properly designed tracking tools that can measure the cyclical function under study and recognize its turn in as close to real time as possible.
Long-term readers of The Harley Market Letter are aware that in performing cyclical analysis of the financial markets, it will often be found that the time period taken for one complete cyclical rhythm will vary from beat to beat. To ascertain the central tendency of the data, Harley performs a statistical analysis of the data. From this analysis, he uses both the mean and the median of the data to project the window of time for the next reversal point. Experience has taught him that even though a cycle has had a history of market lows, it may not necessarily produce another low at the next occurrence. One has to be ready for a low or a high to occur. However, it is little more than academic to know that a cycle has occurred in the past – as a trader, investor, and newsletter author, it is critical to know that a cycle high or low is occurring in the present – necessitating the need for mathematical tools than can track a cycle in real time. One of the tools Harley employs involves the calculation of the rate of change in price – the slope at which a stock or commodity moves up or down. So called “market momentum” is really no momentum at all, for those with a background in physics or engineering will recognize that any measurement of price over time is correctly called price velocity. For a price velocity indicator to be valid, it must be based on cycle length. If it is, the indicator will correctly measure the rate of change of prices with a cycle and turn up or down as the cycle itself turns up or down.
The other calculation the analyst should perform involves determining trend through measurement of price range. Any range-based measurement – stochastic, percentage range, or relative strength indicator – will do. The important point is to employ the calculations over multiple time periods (no less than three). A trade-execution signal will be generated when both sets of indicators – price velocity and price range – turn together in the desired trading direction.
Cyclical turns can be reflected in a number of ways. Sometimes they mark the exact low or high of the move. Sometimes they mark a retest point. At other times they are marked by the apex of a sideways pattern that results in an expansion to the upside or to the downside. It’s not always possible to know in advance which of the aforementioned will define the cyclical structure until after the fact. One form or a multiplicity of forms may occur. Harley defines the cyclical turn as the point at which price velocity balloons in the direction opposite of the trend that preceded it. In a bottoming evolution, for example, the time point that immediately precedes the point at which price velocity suddenly expands to the upside is the cycle low point in his definition.
One final characteristic of cyclical behavior involves the concept of translation. In bull markets, there is the tendency for the cycle high (crest) to occur to the right of the midpoint of the cycle. This is known as right translation, with prices rising for a greater amount of time to the high than it takes to decline to its next low, and is characteristic of bull market cyclical structure. In bear markets, the same cyclical schedule from low-to-low is retained, but there is the tendency for the cycle high to occur to the left of the midpoint of the cycle. This is known as left translation, with prices rising for a shorter amount of time to the high than it takes to decline to it next low, and is characteristic of bear market cyclical structure.
Knowing when to buy and when to sell is the cardinal axiom for successful investing. The knowledge and exploitation of market cycles embodies one of the most powerful analytical tools available for identifying trends and forecasting their reversals. But market cycles do not present the investor with a magical formula that will time a market upturn to the precise moment. What they do afford, in objective fashion, is a means to quantify the timing of your investment decisions.
Indian Time Cycles, Gann and the Future of the U.s. Stock Market
Indian Time Cycles, Gann and the Future of the U.s. Stock Market
“Most Gann aficionados know that Gann used astrology and that the most successful traders use it in their trading, as it is the hidden undercurrent that runs the markets. J.P. Morgan, the founder of the Morgan bank, was fond of saying that “anyone can be a millionaire, but to become a billionaire, you need an astrologer.” He had a private astrologer, Evageline Adams, who helped him tremendously. I have been fortunate to purchase financial astrological books from her library.
It is a little known fact that W. D. Gann went to India and studied Indian Sidereal Astrology. In his notebooks we find sketches of astrological symbols on his charts; and in his memoirs, he discusses his journey to India. In fact, the famous Gann wheel was first used by tea merchants in seventeenth century India. Gann also discussed the importance of using the starting date of when the first futures contract for a commodity began trading for predicting the future of that commodity. To my knowledge, there are very few individuals who use these starting dates to successfully time the markets even though my experience in using Indian Sidereal astrology has shown that these charts are invaluable.
Below is a brief introduction to Indian Sidereal Astrology, an overview of Indian time cycles and how they can be used, and a forecast through 2017 for the U.S. stock market based on this system.
The Western Zodiac vs. the Indian Zodiac
Indian astrology is over 5000 years old and has its foundation in ancient science. Parashara, a great seer or ancient scientist, intuited the laws of space and time responsible for the evolution of human consciousness and recorded his findings in a book called the Brihat Hora Sastra.
The first major difference between Indian and Western astrology lies in the calculation of the longitude of the planets. Ancient Indian astrologers observed that the equinoxes and solstices moved backward by one degree every 72 years, an astronomical phenomenon now known as precession. Over time this has resulted in a difference of slightly over 23 degrees between the tropical Zodiac, used by Western astrologers, and the sidereal Zodiac, used by Indian astrologers. In essence, the two systems differ in their choice of a zero point for Aries–the Western system uses the position of the spring equinox, while the Indian system uses a fixed star. Thus when the Sun is moving into Aries according to the Western system, it is still at 6 degrees Pisces in the Indian system. (For a further discussion of the differences, please see my article in the Winter 1989 NCGR Journal.)
Planetary Periods: Beyond Transits
A dasha is a period of time during which one’s life is influenced or governed by a particular planet. For example, the shortest period, the Sun period, lasts six years, while the longest period, Venus, lasts twenty years. These cycles unfold in a fixed sequence and comprise 120 years before they repeat. The order of the cycles is:
Ketu (Moon’s South Node): 7 years
Venus: 20 years
Sun: 6 years
Moon: 10 years
Mars: 7 years
Rahu: (North Node) 18 years
Jupiter: 16 years
Saturn: 19 years
Mercury: 17 years.
Where the cycle begins is based on the exact position of the moon at the time of birth. For example, when soybeans started trading in 1936, the moon was in the constellation (nakshatra) of Orion, which is ruled by the planet Mars. Thus a sequential unfoldment of cycles began with a seven years Mars period followed by Rahu (North Node of Moon), 18 years, Jupiter 16 years, into its current Saturn period that lasts 20 years etc. If beans had begun trading a day later, then the cycle would have begun from the next constellation, which is ruled by Rahu, or the North Node of the moon. The number of degrees the moon has transited through a nakshatra will determine how much time is left in the initial cycle. Thus if the moon were in the final degree of the constellation, the initial cycle will begin in the last section of the cycle. (Software is available for rapid computer calculation of these cycles–see references below.)
Within major cycles are sub-periods or sub-cycles that also unfold in a set sequential pattern. The sub-cycle begins with planet ruling the major cycle and then continues in sequence. For example, the current Saturn period for stocks started with a Saturn/Saturn period in 1998, and continued with a Saturn/Mercury period in August 2001 followed by a Saturn/Ketu period in 2004, etc. The major Saturn cycle will finish in 2017 and then the U.S. stock market will go into a Mercury major period. In order to properly use the Indian time cycles and their smaller periods, one must have the exact time of the start of the first future’s contract of a commodity. Each minute that one is off can lead to changing the prediction low or high by about 4 days. O’Non and Remnick illustrate the importance of the exact time using an analogy from physics:
To launch a rocket ship to the moon, knowledge of the precise angle, time, and location of the launching on earth are necessary. If it is launched at a slightly different time and angle, it will miss by 30,000 to 40,000 miles.
I have had to travel to the archives of the Chicago Board of Trade and other major exchanges to verify the first tick starting time and have collected an almost complete set of dates and times that I make available to participants in my advanced seminars or through my home study course on Vedic Financial Astrology (see references below). The challenge is that some of this data is very hard to get or was destroyed as was the case for wheat and corn data due to the Chicago fire and New York exchanges merging and not keeping good data. It takes time to rectify the charts and make them useful. The easiest way to understand the effects of a period is too look at past examples. Because we have 215 year of data on the U.S. stock market, and the complete unfoldment of a series of cycles is 120 years, we can go back to the period between 1878 and 1897 to study past analogues.
Application of the Indian Cycles to the US Stock Market
What is extraordinarily exciting about using dashas or Indian time cycles for market prediction is that it allows one to know the exact date that cycles change, to label them, and to quantify whether they are strong ups, minor ups, strong downs, or sideways. If one studies the 215 year history of the stock market, and is familiar with the rules for predicting and interpreting the Indian dasha or time cycle system, the mysterious cycles which seem to govern stocks would no longer be a mystery. For example, by no accident the bull market that began in 1982 coincided with the beginning of a 16-year Jupiter period, which began in late August. In general then, this system predicted the stock market would continue to expand until 1998, since Jupiter is a “”bullish”" planet and is well placed in the natal chart of the May 17, 1792 stock market chart. Rises and falls within the major cycles are explained by sub-periods, or antardasas. These sub-periods can either amplify or diminish the strength of the major period.
Within this 16-year period, the transits of Jupiter, its retrogradation and aspects to it are especially influential since Jupiter assumes the second most important role in the NYSE chart next to the moon, the chart lord. The Jupiter period ended in 1998, when a 19-year Saturn period assumed the second-most important role.
A recent study I did of the NYSE will explain how the dashas can be of use to spot short- term and intermediate declines or rises. Certain combinations lead to very predictable outcomes. To get daily timing on the stock market, one needs examine four or five levels of dashas, or cycles, to break the larger 20- and 2-3-year periods down into 20- and 3-4- day periods. Amazingly, the cyclical combinations that are negative on the larger scale level will often prove negative on the smaller scale.
A comparison of the October-February 1987-88 fourth level cycles (Jupiter/Mercury/Venus/Rahu etc.) with the third level periods in 1901-1904 (Mercury/Venus/Rahu) reveals that the major lows coincide with a repetition of particular combinations. This principle can also be extended to sections of other cycles in other years. For example, note the following:
Venus/Rahu/Saturn: (8-28-29 to 2-17-30) Declined from high of 372.06 on 9-03-29 to a low of 230.07 on 10-29-29. Jupiter/Mercury/Venus/Rahu/Saturn (Dec 4, 1987). Signaled another major low and decline to 1747 on the Dow after being as high as 2051 following the crash.
Jupiter/Mercury/Venus/Venus/Rahu (October 19, 1987) The third level Venus period did contribute to the direction of the decline in combination with a number of bearish oppositions, the return to an eclipsed constellation, and the sidereal transit of Uranus into Sagittarius. This one example indicates how the Venus/Rahu combination can be used to signal a sharp decline if it occurs in a particular combination.
This particular Venus/Rahu combination is only one of many combinations that one can label, and historically study. Other combinations are bullish, such as when the sequence unfolds from a Sun period into a Moon period and onto a Mars period. For example, the stock market’s last major Moon Period went from August 1947-August 1957. During that time the Dow went from 179.74 to 492.32, a gain of over 200%. During smaller moon cycles within larger periods, such as the Mars/Moon period from Jan 21, 1964 to August 21, 1964 the market climbed from 776 to 838. And in the Rahu/Moon period from Jan 31, 1980 to July 31, 1981, the Dow climbed from 875 to 935. Even on the third level we can usually count on a rally during a moon period, such as the Jupiter/Mercury/Moon period from April 4, 1988 to June 13, 1988. We saw a surprise rally that began in late May and took the Dow from 2000 at the beginning of the period to almost 2200 by the end of the period.
From the above examples, one can see the value of being able to label and quantify the cycles in order to predict the magnitude of the move. As many cycle analysts know, one can often find major cycle lows and entry point but still not have any idea how large the move is going to be. The Indian time cycle analysis is a genuine solution to forecasting because it can predict the future, not just suggest it from the past.
Future of the US Stock Market Based on Indian Cycles into 2017
A 19-year lackluster Saturn period in 1998-2017 does not have the bullish energy that we have seen in the Jupiter Period from 1982-1998. Consequently, the market will not go straight up nor will it go straight down–and it turns out that Venus periods have the biggest percentage losses. As we saw in the 18 year Rahu period from August 1964 to August 1982, the market can go net sideways in relatively narrow price bands over many years.
There is an approximate high into June 9, 2007 followed by a sharp decline into the week of Oct. 22, 2007 with a lower low due into about the third week of April 2008. We are still watching patterns to translate this into price movement.
There appears to be a recovery rally into late May 2010, then a sharp fall into Dec. 2010, a recovery toward the highs into Jan. 2013 and a major decline into 2013 that is one of the lowest points in the whole period, a recovery into August 2015 and then a sharp fall into the end of the period, which makes new lows into April 2017. Hence the periods to be long stocks appear to be Feb.-June 2007; April 2008 to May 2010 and Dec. 2010 to Jan. 2013. We adjust these directional indicators using Elliott Wave pattern analysis to predict price. There appears enough upward momentum in the current cycle to take stocks much higher into the June 2007 cycle high.
Gann reminded us that we have to take everything we know and apply it to our forecasts. Indian Time cycles are one tool. In our newsletter, we combine it with Elliott wave pattern analysis, minor astrological timing from planetary aspects, and five other proprietary cyclical techniques as well as technical analysis.
Back in 1990 and 1994, when everyone was bearish about stocks, we predicted DOW prices well over 7000 into 1998-2000 based on our dasha cycle models.
Conclusion
Anyone attempting to uncover the mysterious laws of nature that underlie the commodity and stock markets will be rewarded and intrigued by the depths of Indian astrology. The study of Indian astrology leads not only to knowledge of economic laws, but ultimately to knowledge of the self. Understanding Indian cycles and transits is as important for trading successfully as a good timing system. A combination of the two is astoundingly useful and leads to a profound appreciation of the order of natural law. While no astrological system should be used 100% to time market entries and exits, using both astrological and technical signals can certainly stack the odds in one’s favor.”