I make it a point to record the performance
of the Momentum Strategies Report on a
weekly basis. I believe this is important for providing subscribers (and
potential subscribers) with an accurate representation of how my recommendations
have performed in the recent past. Instead of posting the performance in
the form of percentage gains/losses (as most newsletter do), the cumulative
results are presented in the form of a simple line graph. The old saying
“charts don’t lie” applies in this case.
Below is the performance graph of the last 12
months. It shows the cumulative performance of the stock and ETF
recommendations made in the “Trading Positions” section of the Momentum
Strategies Report.
The above graph is an unvarnished reflection
of how the recommendations made in MSR have performed since April 2014. This
performance was achieved, throughout most of the last year, by holding only a
single stock or ETF position in the model portfolio. While I’m not averse to recommending multiple
trading positions, I felt that the market environment of the past year didn’t
warrant the undue risk of holding several stocks or ETFs simultaneously due to
the volatility risk inherent within a trading range market.
The upside to using a technical trading
discipline is that your drawdown and relative volatility will be much lower
than that of the broad market. Moreover, in bear markets a technical
trading system such as this one will invariably outperform the broad market,
even without resorting to short sales.
In summary, the trading system employed in
the MSR newsletter is one of the most conservative, yet consistently reliable
systems you will find in any stock market newsletter when it comes to
delivering long-term gains without exposure to extreme volatility. It’s
based on the principle of making market commitments only when the odds are
decisively in your favor. Otherwise, a cash position is warranted in the
name of capital preservation – the first commandment of the financial
markets.
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