Smith had also pointed out to me that this system utilizes various sentiment indicators as well as studying the stocks and sectors that are in an established uptrend. As they both confidently explained, "Since 1984, a buy-and-hold strategy on the S&P 500 led to 8.2% annualized returns. Our simple trend system was able to up that gain to 9.8%. And we stayed invested 73% of the time.
"Our new sentiment system demolished those results. It returns 17% annualized gains. And it was only in "buy" mode 45% of the time. The other 55% of the time when our system said to stay on the sidelines it led to just 1.6% annualized returns.
Said another way, this system claims to get investors into a trade during the optimum times and keeps them out when the market is either flat or down. Incredibly, the results were even better as they studied this more carefully and dug deeper.
"The system produced 17 trades over our 29-year test. Fourteen of them were winners. That's an 82% win-rate and that crushes our trend strategies win rate of just 39%." They clarified that their trend strategy does a good job making money, but it has too many false signals. These result in small losses and lowered their odds of entering a winning trade.No investment system or trading strategy is perfect and there are extenuating circumstances when all of them can fall flat on their faces. Yet, anything that improves our chances of entering money-making trades and avoiding the losers can help us make headway towards our retirement savings goals. To learn more about "True Wealth Systems" I'd suggest that you begin here and do your own careful due diligence. If you can, compare it with the track record and claims of other investment strategies and proprietary systems that are ubiquitous on the worldwide web and see what you can find. Make sure they've been tested and back-tested, and see how many variables they use to come up with their conclusions. The more reliable ones like "True Wealth Systems" cost hundreds of thousands of dollars to develop and test. There's no sure things but let's do what we can to stack the odds in our favor. At the time of publication the author was long NEM and ABX. Follow @m8a2r1 This article was written by an independent contributor, separate from TheStreet's regular news coverage. Make smarter trading decisions and provide investment ideas that could help make you richer. Bryan Ashenberg does the dirty work so you don't have to!
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV