investor psychology monetary conditions market valuation market trend jeff hays president hays...
TRANSCRIPT
Investor Psychology
Monetary Conditions
Market Valuation
Market Trend
Jeff HaysPresident
Hays Advisory, LLC
So What Do We Do Now?
Investor Psychology
Monetary Conditions
Market Valuation
Market Trend
For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.
Market Trend Analyzer – Investment Phase
When in the Investment Phase: • Focus on the long-term moving average
• Asset allocation decisions are determined by the AAM
For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.
Short TermMedium
Term
Long Term
Market Trend Analyzer – Trading Phase
• Short-term and Medium-term moving avg. breaks through Long-term moving avg.• Raise 30 – 40% Cash• Focus shifts to action of the shorter-term moving avgs.
For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.
Market Trend Analyzer – Trading Phase
For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.
• Short-term moving avg. turns up - purchase 15 – 20% in ETF’s• Hold 15 – 20% Cash
• Short-term moves through medium-term m/a. - purchase add’l 15 – 20% in ETF’s • Hold 0% Cash
Market Trend Analyzer – Investment Phase
For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.
• Remain in trading mode with up to 40% of the portfolio in ETF’s• Short-term and Medium term moving avg. above the Long-term moving avg.• Gradually replace ETF’s with individual stocks/0% Cash
Market Trend Analyzer – 1929• Excessive Margin!• Extremely Overvalued - P/E ratio of 32.6
For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.
S&P 1929-1933
Market Trend Analyzer - 1974• DJIA crosses 1,000 – Investors Bullish?• Yield Curve inverted• Nifty Fifty - Xerox - 49 times earnings, Avon - 65 times earnings, Polaroid - 91 times earnings.
For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.
S&P 500 1972-1976
For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.
2000 Bear Market
50% Cash
23%
30%- 40%
AAMRecs.0% Cash
Q1 2000 - Q3 2002
• Greedy investors• Tight monetary policy • Overvalued
LTG Recommended Asset Allocation
50% Stocks 25% Bonds
25% Cash0%
The Anomaly
For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.
S&P 500 2007-2009
Asset Allocation100% Stocks
0% Bonds0% Cash
Back-tested Performance*
We back-tested the DJIA from 1900- 1929 and the S&P 500 from 1930 – 2009.* For Illustrative Purposes Only. We are We back-tested the DJIA from 1900- 1929 and the S&P 500 from 1930 – 2009.* For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material. Past performance is no indication of future results.not soliciting or recommending any action based upon this material. Past performance is no indication of future results.
Cash Levels Decade Max Drop Annual Return (If Trade <= 1 Year Actual Return)
0 -20.91% 7.8%
30 - 40 -45.26% -12.0%
0 -20.91% 7.8%
80’s/90’s
80’s/90’s
Summary
For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.
• We believe the market trend analyzer is a great compliment to our current asset allocation model.
• We are currently using it as a guide and we will fully implement it once it recommends we go back to a fully invested stance.
• It is not perfect and will cause some occasional false alarms, but we believe it will add significantly to our results over the long-term.