For the first time, I have decided to offer an e-subscription to the signals from one of my favorite proprietary strategies. I initially developed this strategy after the 2008 crash for use in my IRA account and have made several minor enhancements over the past few years. The simulated, compound-annual return from 1/1/1990 to 7/29/2013 was 20.23% (after estimated transaction costs).
The historical results presented throughout this article include the backtest and forward test periods. The monthly subscription cost is $50 for non-professionals (individual investors) and $1,000 for professionals (banks, hedge funds, insurance companies, registered investment advisers, CTAs, mutual funds, endowments, pension plans, etc.). The annual subscription cost is $499 for non-professionals and $9,990 for professionals. All fees are paid in advance via PayPal.
I selected this strategy for an e-subscription because it is easy to understand and to execute. It is a conservative, long-only, asset allocation strategy that rotates monthly among five large asset classes: large-cap U.S. stocks, developed country stocks in Europe and Asia, emerging market stocks, U.S. Treasury Notes, and commodities. Stop-loss orders are used on every trade to control losses and facilitate position sizing. This article describes the mechanics of the Asset Allocation Rotational (AAR) strategy and explains how to place your order using the PayPal buttons at the end of this article. Even if you are not interested in a subscription, you should find some of the insights helpful as you research and develop your own trading strategies.
April 2013: Most Extreme Investor Leverage Since 2001 Bubble
In a recent article "Earnings-Price Divergence Always Followed by Negative Returns," I noted that every extreme divergence (-20% or lower) between year-over-year corporate profits and equity prices in the past 50 plus years was followed by negative year-over-year equity returns. In a subsequent article titled "S&P 500 Overvalued Based on Price-to-Sales Ratio," I observed that the S&P price-to-sales ratio had reached extreme levels, further limiting the upside potential for the equity market. Unfortunately, I recently uncovered more bad news for the bulls: investor leverage is the highest since the height of the 2000 equity market bubble.
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