Home > Boards > Free Zone > A.I.M. > Systematic Investing Group (SIG)

LC,I recently re-read a post by Lance Roberts

Public Reply | Private Reply | Keep | Last ReadPost New MsgReplies (2) | Next 10 | Previous | Next
BowlerBob Member Profile
 
Followed By 0
Posts 76
Boards Moderated 0
Alias Born 05/03/08
160x600 placeholder
BowlerBob   Friday, 04/17/15 06:23:38 PM
Re: None
Post # of 785 
LC,

I recently re-read a post by Lance Roberts that I thought might be appropriate for this board because it is a variation of "Core" Investing, but does not fit on the AIM board. The article is: Avoid the 10 Worst Days.

He has a link at the top of his post "The Math of Loss" to a previous post that gives additional details. The idea is that you have some money with which to buy a position in a stock or ETF -- so this is not "stepping-in" like DCA or Synchrovest -- but it is systematic in its approach.

Basically, he uses three "timing" mechanisms to step-in and step-out of your holding. His purpose is that "Buy & Hold" investors actually spend 90% to 95% of their investment time recovering from the losses from the previous high point, so he wants a method to avoid those Down-Turns...
Quote:
"Clearly, avoiding major drawdowns in the market is key to long-term investment success. If I am not spending the bulk of my time making up previous losses in my portfolio, I spend more time compounding my invested dollars towards my long term goals."

.

He has another post, How Long is Long-Term?, that has a long-term graph with horizontal lines from each "high point" over many years. This makes it easy to see that 90% to 95% of "lost time".

It is important to have the three "Timers" be "distinct" from each other in their signal generation -- he doesn't want to generate all three signals within a very short time frame. He doesn't state about how to "initially" enter the position, that would probably be up to the individual investor. My assumption is that if all three Timers are Long, then it is okay to go "All-In" and then obey the signals to step-out, when they come. Once he is in the position, he never goes "All-Out" and explains why. My own preference would be to wait until all three signal are "Sells", then step in by thirds (33%) on each signal. From that point on, you would step in or out by quarters (25%), as he writes.

I hope some of you might find this approach interesting and/or usable for your investing style.

Bob

Public Reply | Private Reply | Keep | Last ReadPost New MsgReplies (2) | Next 10 | Previous | Next
Follow Board Follow Board Keyboard Shortcuts Report TOS Violation
X
Current Price
Change
Volume
Detailed Quote - Discussion Board
Intraday Chart
+/- to Watchlist