Buy Low & Sell High

Dear ETF Traders,

In 1977 a writer came up with a simple mathematic formula that would issue buy and sell advice on a stock or mutual fund.

You he see he postulated that if you had a systematic technique for buying into price weakness, and selling into price strength that you could compound portfolio value pretty substantially.

He tinkered with this idea for years until he finally stumbled onto the “secret” that made it all work.

It was in what he called the PC or portfolio controller.. Once he nailed down the formula for that the rest was getting easy.

The idea is basically this…

Let’s say you wanted to buy $10,000.00 worth of the DIA or SPY, the Dow 30 and S&P 500 ETFs

You start your holding with only 50% of what you would have purchased as a “buy and Hold” investor and you keep the remaining 50% as a cash reserve, but allocated to this “holding”.

This holding now has an equity component and a cash component. Simple enough. $5,000.00 each for a total of $10,000.00

What we don’t know is if the market is going up or down, and for the most part…it doesn’t matter!

If the market goes up, the system will tell you how many shares to sell at exactly what price.

If the market goes down the system will tell you exactly how many shares to buy and at exactly what price.

Look at the following image, and you see a fluctuation.

The idea here is to “trade around your core position” buying more when prices are falling, and lightening up as prices rise.

The benefits here are more that just the obvious. As you will see when time goes by, the system will always advises buying into weakness and selling into strength.

Take a look at the following…

Investor A and Investor B bought the same ETF that bounced from $10 to $4 and back.

Investor A 500 Shares “PCA User”
PCA User has 5K in cash, and 5K in stock

Investor B 1000 Shares Buy & Hold
(Bought 10K in stock and is 100% at risk)

Investor A 500 Shares “PCA User” PCA User has 5K in cash, and 5K in stock		Investor B 1000 Shares Buy & Hold(Bought 10K in stock and is 100% at risk)
Price	Value	Price	Value
$10	$10,000	$10	$10,000
$5	$7,275	$5	$5,000
$4	$6,273	$4	$4,000
$8	$12,240	$8	$8,000
$10	$14,376	$10	$10,000
PCA 44%	PCA Profit $4,376	Stock Price 0%	B & H Profit $0

Now both these guys bought and held the same ETF for the same period of time, but the system user deployed his cash strategically and reaped huge benefits over the buy and holder.

I will show them to you in black and white.

The system user is up 44% with a profit of $4,376 while the buy and holder is only even, with nothing to show for all that sweating he did when his portfolio was only worth 4 grand.

The system recommended 5 trades 3 Buys & 2 Sells over the time period, and allowed an average of only 67% of our 10K investment to be at risk.

The buy and hold investor was 100% at risk the entire time.

Its too bad really, because the return on capital at risk was not a mere 44%, it was a whopping 63.1% and better still, we now own 842 shares at an average cost of only $5.90 Per Share.

So overall we started with …

• Beginning Portfolio Value $10,000 , The same as the buy and hold investor.

But now we have…

• Current Portfolio Value $14,376, way better than the buy and hold investor.
• Current Stock Value $8,415.00 58.5%, hmm what do you know… more than we started with.
• Current Cash Reserve $5,960.00 41.5%, wow! actual clean profit, off the table and safely in the bank!
• 842 Shares Owned @ an average cost of only $5.90 and currently worth $10.00

Imagine that, clean profit in the bank… Boy that feels good.

This looks better all the time.

But if you knew that the more times you compound like that the better it gets, its just like compound interest, only you are actually compounding shares.

Every serious investor that wants a REAL strategy that works should try this system.

If Investor A got to ride this roller coaster just 2 more times from 10 to 4 and back he would be up to a portfolio value of $27,302!

And all this on a ETF that never once went over the ten dollars we paid per share on our initial purchase.

Are you beginning to see the power of trading around a core position?

I thought you would.

Now take a look at this chart…

I included this chart to show you that frequency of the oscillation can be key to getting better returns.

For example…

In the below example, if you were selling ever time the line crossed red to the upside, and buying when it crossed green to the downside, you can clearly see that volatility is your friend.

The more trading activity you get, the better off you are.

It’s also important to note that there is a LOT more going on here than meets the eye.

If you think this looks easy and that you could do it yourself… think again.

The formula itself is not for the squeamish, and there is a lot to consider.

For example… Strongly trending markets make for special opportunities with this system. You would hate to miss them by not knowing the nuances of the method that can make you even more money.

Listen…

When you have mastered this system, you’ll never fear a bear market again, because ever time the market goes down… it means more bargains for you.

Be sure to be at the LIVE EVENT!

We will show you all the power techniques of using this simple system and even tell how to make even more with certain strategies that you can employ along with this method.

 

This system has been around for 31 years and still people swear by it’s effectiveness. There are thousands of people world-wide practicing this simple method to compound their wealth… especially during “bad markets”.

I want you to know all there is to know about this great system.

That is why should keep an eye on your inbox for the online event tomorrow.

We’ll see you there!
Sincerely,
Bill & Doug
Investing Systems Inc.

This entry was posted on Wednesday, July 23rd, 2008 at 10:47 am and is filed under Main Content, The Trading System. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.