MY SYSTEM

As promised, here are some projections I have developed to help me make my investments decisions. These projections are based on maturity sometime during the year 2013.  Obviously there are many reasons why these projections may fail. Wars, natural or man-made disasters and many other events may derail the economy and our equity markets. Nevertheless  we all know how resilient markets can be and how quickly they can recover from temporary setbacks. 

US Natural Gas (USG-N)  shows the greatest potential gain but also presents the greatest potential risk.  Natural gas has had a bumpy ride so far this year due to over supply and reduced demand.  However, sooner or later the demand for natural gas will pick up and as the supply picture improves, so will the price.  Still UNG has it’s own problems, mainly because it has grown too big too soon.  But that too may soon reverse and than it could become a real dynamo.

MY SYSTEM IS VERY SIMPLE.  It basically mimics the system I used when successfully running the CAPP program for Pacific Western Financial Corp.  The main difference is that I now use ETFs instead of mutual funds and my indicators are also different. But the idea is the same: “Be invested when the markets are going up and be in safe Money Market Funds when markets fall.” It means a very low risk but still very profitable approach to investing.

The idea is to maximize profits when the market is in an uptrend and avoid losses when markets go down. 

Now there is a new tool available to increase profits by investing in “BEAR” funds when the maker trend changes from up to down.  This is a new angle which I have only used on a trial bases. I’ll soon be able to use it when our markets go through a real correction.  Meanwhile I’ll mainly focus on the positive side and try to maximize profits investing with a bullish bias.

This study is meant as an addendum to my essay “Crazy Markets” of last October. 

Ted Lagerway

November 3, 2009