TIMINGTRUTH.COM NEWSLETTER

2010-08-02

CURRENT SIGNAL TRENDS:

It's August and the markets have been going sideways for the last 9 months.  July showed some movement in the right direction but we encourage our subscribers to look to the long term. 

NEWS:

Two news items caught our eyes this past month.  First was the whistle-blower incentive contained within the Frank-Dodd financial reform bill. The provision provides an incentive of 10 to 30 percent of any settlements and fines imposed.  Given recent sanction amounts of up to 800 million dollars that's a LOT of incentive!  Second item was the housing price roller-coaster.  Of interest is the notion that the housing market is a broad indicator of economic health since it shows both the availability of credit and consumer confidence.  Something to think about.

LONG TERM  MARKET TRENDS:

This chart shows the last 7 months.  While May through June were not encouraging the beginning trend we see in July is.  We continue to watch and wait.

OUR STRATEGY INSIGHTS:

This month we look back at exactly how the TimingTruth strategy works.  Below is the chart from our home page of the S&P 500 index fund SPY with the TimingTruth signals indicated.  The point is to compare what we do differently from a traditional Buy & Hold strategy.  The obvious difference is that we Buy & Sell while they Buy & Hold.  We're not trying to be clever here but rather to call attention to the importance of selling.  Look at the first Sell signal issued around 2001.  Here the TimingTruth strategy diverges from the Buy & Hold strategy because we didn't ride the market down to the bottom.  That one act made all the difference.  Observe that even 10 years later the Buy & Hold strategy has not recovered those losses.  Essentially the same thing repeated in 2009 allow the TimingTruth strategy to distance itself even farther from the Buy & Hold strategy.  Only 2 Sells and 2 Buys in about 10 years makes a difference of roughly 550% (It's improved since we created our Home page!)