Tuesday, April 2, 2013

MSR quarterly performance review

At the end of each quarter I publish a complete record of all individual stock and ETF trading recommendations made in the Momentum Strategies Report newsletter.  This report allows subscribers to track the accuracy of the trading methods used by MSR.

Unlike many investment advisories, I believe in maintaining a small and manageable trading portfolio in order to maximize returns while minimizing risks.  You may have noticed that most investment newsletters maintain portfolios consisting of several – perhaps even dozens – of stocks at any one time.  Besides being cumbersome to track and expensive to maintain, it’s usually counterproductive.  Keeping a small number of technically and fundamentally sound trading positions – perhaps as few as one or two at a time – is far simpler and can be just as rewarding.

Following is the MSR Trading Portfolio recommendations for Q1 as of Mar. 31, 2013:

1/8: Bought Pulte Group (PHM) @18.99
1/10: Bought PowerShares S&P 500 High Quality Portfolio ETF (SPHQ) @ 16.22
1/19: Took some profit in PHM @ 20.49
2/4: Bought Marathon Oil (MRO) @ 33.97
2/8: Sold remainder of PHM @ 19.47
2/19: Sold MRO @ 35.75
2/25: Sold SPHQ @ 16.56
3/5: Bought Bristol Myers Squibb (BMY) @ 37.50
3/10: Bought PowerShares S&P 500 High Quality Portfolio ETF (SPHQ) @ 17.08
3/15: Took some profit in BMY @ 39.00

The first quarter of 2013 was a profitable one for us as you can see.  It must be pointed out that bull markets are far more forgiving than bear markets when it comes to making trading and investment decisions, however.  Timing isn’t as crucial for buying stocks as it is for selling short.  Moreover, the volatility factor is always less in a bull market which makes it less likely that a conservative stop loss discipline (which MSR always employs) will be “whipsawed.”  

The trading methodology employed by MSR is based mainly on technical factors including price pattern, internal momentum, technical market condition and relative strength.  Other factors including earnings estimates for individual companies, relative volatility, etc. are also part of the selection process.  Price-related considerations are always paramount as long experience proves.

One of the challenges that every strategies faces is how to sidestep market declines.  This is simple enough if you employ a conservative stop-loss strategy on all your trading decisions.  Amazingly, few strategists seem to have mastered this relatively simple art.  Worse, all too many are inclined to tempt fate by going heavily short at the first sign of weakness.  Unless your timing is nearly perfect, even a correctly bearish posture in a bear market doesn’t always produce profits (just ask George Soros re: the 2008 credit crisis).  Experience teaches that it’s best to maintain a heavy cash position during market downturns rather than leveraging up on bearish trades.  As the venerable Bob Prechter has said, “There’s nothing wrong with cash.  It gives you time to think.” 

MSR employs a strategy that automatically puts us into an all-cash position during periods of market weakness.  Only during fierce bear markets when the market’s internal path of least resistance is strongly to the downside do we employ short selling, and selectively at that.  Investment advisories that do otherwise are more likely to lose money than preserve it. 

If you are a serious trader or investor looking for a safe, reliable approach to market timing you may want to subscribe to the Momentum Strategies Report.  As the long-term record clearly shows, our technical discipline allows us to profit during bull markets with minimum volatility while our drawdown/volatility factor is much lower during bear markets than the industry average.

Subscribe to the Momentum Strategies Report now and receive as my compliments to you the 2013 Forecast issue. 

In addition to that you’ll also receive the MSR newsletter emailed to you each Monday, Wednesday and Friday.  MSR provides reliable forecasts and analysis of U.S. and global markets based on internal momentum, cyclical and technical factors.  Low-risk stock and ETF recommendations are also made based on my proprietary system of selection.  Specific entry and exit instructions are also given for each recommendation.

Bonus: Subscribe to MSR today and receive a free PDF copy of my latest book, “2014: America’s Date With Destiny.”  Don’t miss what the Kress cycles have in store for the coming years! 

[For the complete 2013 Kress cycle forecast for the U.S. stock market and the latest newsletters, subscribe to the Momentum Strategies Report at the link below.]

Your guide for 2013,

Clif Droke 

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