Hi There,

I hope you enjoyed the online presentation about the new PCA software.

Here is where you need to be to get the special offer from the online event.

The Special Deal includes…

The newest Version of Position Cost Averaging including… One Year of Premium Data One Year of Priority Technical Support One Year of Free upgrades Delivered On CD-ROM Taxes and Shipping Included
You also get Robert Lichello’s Book How to Make $1,000,000 In The Stock Market Automatically The Book that started it all back in 1977 which fully explains the math behind the software. A Must Read!

But that’s not all…

You also get 4 coaching sessions…

• Using The PCA Software
• Building a Portfolio & Asset Allocation
• Tinkering with the settings
• Questions and Answers from new users.

And still there is more…

If you attend the “Tinkering with the Settings” Session you’ll also get
another version of PCA with full back-testing and optimization tools FREE!

This package with the software, the book, the coaching
and the additional software is a $758.00 value for just $199.00

CLICK HERE TO ORDER TODAY

You will be glad you did and we’ll be glad to have you.

Welcome aboard!

Sincerely,

Bill & Doug
Investing Systems Inc.

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)

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.

Dear ETF Traders,

Yesterday we looked at what an ETF is and how it functions. We covered how they are traded and even what each player has to gain.

If you are anything like me you see that ETFs are definitely something that you need to check out.

One of the BIG advantages is that ETFs eliminate much of the “single company risk”. Because ETFs are based on baskets… should any single stock get into trouble, the damage to the overall basket is minimized.

That is one reason why I suggest diversification. Oil and Airlines for example. When one goes up, the other goes down. You can be safely tucked in between.

Another good idea would be to hold sector ETFs, you can get them for just about any sector that you can imagine from Transports to Alternative Energy… from The Japan ETF to the Australian Dollar.

There is an ETF for just about any asset class you can think of.

For the more adventurous among you there are even leveraged ETFs, but we don’t want to get into those just yet.

In fact ETFs have become such a big part of the market that we built an ETF Dashboard for our Research lab because it helps us watch the whole market with far fewer symbols.

We can watch world markets, currencies, commodities, indices, sectors and more just by looking at the ETFs.

One thing I have discovered is that ETFs seem less volatile that indices or individual; stocks, especially at the market open. This is another big advantage for you.

If you download the Market Toolbox (it’s free) you can see our whole ETF Research Center in the Finance Portal.

We also have lists and information on World ETFs, Index ETFs, Industry ETFs and a directory of Leveraged ETFs.

There are ETF Screeners and a whole bunch of additional resources.

Download the Toolbox, install it, read the welcome page, then go to the Free Finance Portal Section. On the left will be a link to the “ETF Center” Enjoy!

In tomorrows E-mail we’ll look at the Trading System that seems custom made for ETF investing.

This 31 year old formula is now so powerful and sensible that it is really amazing that people do not talk about it more.

We’ll look at the overall strategy, and the tactics of the system. We’ll show you how to select ETFs for the system.. and when NOT to use it.

Do not miss tomorrows e-mail and we’ll see you at the LIVE event in 2 days.

Best wishes and good investing
Doug Newberry

Investing Systems Inc.

This is the first in a series of 3 educational e-mails relating to Thursday Night’s ETF Trading seminar for long term investors.

Let’s first look at what exactly an ETF is…

An ETF is an Exchange Traded Fund.

According to the ETF Zone…

ETFs are securities certificates that state legal right of ownership over part of a basket of individual stock certificates.

Several different kinds of financial firms are needed for ETFs to come into being, trade at prices that closely match their underlying assets, and unwind when investors no longer want them. Laying all the groundwork is the fund manager.

This is the main backer behind any ETF, and they must submit a detailed plan for how the ETF will operate to be given permission by the SEC to proceed.

In theory all that a fund manager needs to do is establish clear procedures and describe precisely the composition of the ETF (which changes infrequently) to the other firms involved in ETF creation and redemption.

In practice, however, only the very biggest institutional money management firms with experience in indexing tend to play this role, such as The Vanguard Group and Barclays Global Investors.

They direct pension funds with enormous baskets of stocks in markets all over the world to loan stocks necessary for the creation process.

They also create demand by lining up customers, either institutional or retail, to buy a newly introduced ETF.

The creation of an ETF officially begins with an authorized participant, also referred to as a market maker or specialist.

Highly scrutinized for their integrity and operational competence, these middlemen assemble the appropriate basket of stocks and send them to a specially designated custodial bank for safekeeping.

These baskets are normally quite large, sufficient to purchase 10,000 to 50,000 shares of the ETF in question.

The custodial bank doublechecks that the basket represents the requested ETF and forwards the ETF shares on to the authorized participant.

This is a so-called in-kind trade of essentially equivalent items that does not trigger capital gains for investors.

The custodial bank holds the basket of stocks in the fund’s account for the fund manager to monitor.

There isn’t too much activity in these accounts, but some cash comes into them for dividends and there are a variety of oversight tasks to perform. Some managers have leeway to use derivatives to track an index.

This flow of individual stocks and ETF certificates goes through the Depository Trust Clearing Corp., the same US government agency that records individual stock sales and keeps the official record of these transactions. It records ETF transfer of title just like any stock.

It provides an extra layer of assurance against fraud.

Once the authorized participant obtains the ETF from the custodial bank, it is free to sell it into the open market. From then on ETF shares are sold and resold freely among investors on the open market.

Redemption is simply the reverse. An authorized participant buys a large block of ETFs on the open market and sends it to the custodial bank and in return receives back an equivalent basket of individual stocks which are then sold on the open market or typically returned to their loanees.

What motivates each player?

The fund manager takes a small portion of the fund’s annual assets as their fee, clearly stated in the prospectus available to all investors.

The investors who loan stocks to make up a basket make a small interest fee for the favor.

The custodial bank makes a small portion of assets likewise, usually paid for by the fund manager out of management fees.

The authorized participant is primarily driven by profits from the difference in price between the basket of stocks and the ETF and on part of the bid-ask spread of the ETF itself.

Whenever there is an opportunity to earn a little by buying one and selling the other, the authorized participant will jump in.

The process might seem cumbersome but it does allow for transparency and liquidity at modest cost.

Everyone can see what goes into an ETF, investor fees are clearly laid out, investors can be confident that they can exit at any time, and even the authorized participant’s fees are guaranteed to be modest.

If one allows ETF prices to deviate from the underlying net asset value of the component stocks, another can step in and take profit on the difference, so their competition tends to keep ETF prices very close to it underlying Net Asset Value (value of component stocks).

Why Trade ETFs?

ETFs are the most practical vehicle. They help the investor focus on what is most important, choice of asset classes.

All the major stock indexes have ETFs based on them, including:

• Dow Jones Industrial Average
• Standard & Poor’s 500 Index
• Nasdaq Composite

There are ETFs for large US companies, small ones, real estate investment trusts, international stocks, bonds, and even gold.

Pick an asset class that is publicly available and there is a good bet that it is represented by an ETF or will be soon.

Traditional mutual funds take orders during Wall Street trading hours, but the transactions actually occur at the close of the market.

The price they receive is the sum of the closing day prices of all the stocks contained in the fund. Not so for ETFs, which trade instantaneously all day long and allow an investor to lock in a price for the underlying stocks immediately.

ETFs are economical to buy and especially to maintain over the long-run, making them especially attractive for the typical buy-and-hold investor. Annual fees are as low as .09% of assets, which is breathtakingly low compared to the average mutual fund fees of 1.4%.

Although investors must pay a brokerage transaction to purchase them, with discount brokers this becomes negligible with sizable trades. There are a few easy-to-avoid pitfalls to watch out for.

Tax effects are also not to be ignored, and ETFs perform well after-tax.

They can be margined, and options based on them allow for various defensive (or speculative) investing strategies.

Their safety as a securities instrument (considered separately from the safety of any particular asset class they might represent) is considered the same as stock certificates themselves.

Internally, ETFs are far more complex entities than mutual funds.

A fascinating combination of players, including brokers, money managers and market specialists combine to make them run smoothly. Legally, ETFs are a class of mutual fund as they fall under many of the same Securities Exchange Commission rules that traditional mutual funds do. But their different structure means that the SEC has imposed different requirements from traditional mutual funds in how they are bought and sold.

ETFs are index funds at heart, so investors are encouraged to study the philosophy of index investing which downplays stock picking in favor of buying the market.

But unlike most traditional index funds, investors need not take a passive, buy-and-hold approach.

ETFs are also becoming favorites of hedge funds and day traders who like to pull the trigger frequently. Both types of investors may coexist and in fact strengthen each other by lowering overall transaction costs.

Now that you know what an ETF is and how they work…

In our next episode we will look at the various kinds of ETFs…

Index ETFs

Sector ETFs

Currency ETFs

Emerging Markets ETFs and More

We will be discussing an asset allocation strategy to accompany the trading system that we will cover in part 3.

The LIVE Seminar Night event will go deep into the trading system and fully explain the benefits of this disciplined systematic investing technique.

Stay tuned for part 2 tomorrow.

Until tomorrow…

Sincerely,

Doug Newberry