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Archive for the ‘Resources’ Category

The January Barometer

Tuesday, February 8th, 2011

With January now in the books its time to look at the always enlightening data from Yale Hirsch over at the Stock Traders Almanac.  Mr Hirsch devised the January Barometer back in 1972, which states that as the S&P500 goes in January, so goes the year.  The indicator has registered only six major errors since 1950 for a 90% accuracy ratio. What I find interesting is that of the 6 years that were predicted incorrectly, 4 were negative for January and then finished positive for the year. Translation, even though this indicator was wrong in these four years, the market was bullish for the full year. 2009 was one of those years as January closed down 8.6%  but the full year return was 23.5%.  The S&P500 was up over 2% for the month of January which bodes well for the bulls this year according to the barometer.  As you may know, 2011 is also a pre-presidential election year. Full years followed January’s direction in 14 of the last 15 pre-presidential election years. The sole error was in 2003, as a new bull market was beginning.  Time will tell if 2011 follows the historical predictions of the January Barometer or the pre-presidential election year trends, but as always, we’ll take all the good news we can get.

Option Series #1 Covered Calls

Friday, October 1st, 2010

Ohio State football  coach Woody Hayes  is one of a few who is accredited with saying that when you put the ball in the air, three things can happen and  two of them are bad.  In the Equity markets three things can happen when you purchase a stock. It can go up, down or sideways.  Only one of these outcomes is good.  In contrast, with a Covered Call, the same three things can happen to the underlying stock yet two are good.

A covered call is an investment strategy that may help investors manage risk,  enhance returns and simply make money during sideways markets.  A covered call is one of the most conservative ways to participate in the equity (stock) market and this strategy actually entails less risk than simply being long (owning) a stock outright.

Covered Call

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Welcome!

Monday, July 26th, 2010

Thank you for visiting the Decision Investments blog. We look forward to keeping you up-to-date with timely Market Commentary, actionable investment ideas, valuable Financial Planning resources and other relevant content.  We encourage you to subscribe to the RSS feed and share the site with friends, family, coworkers or others who may also benefit from it. In the mean time, please browse our new website and see all that Decision Investments has to offer.

Sincerely,

The Decision Investments Team

5 Strategies for Wealth Recovery

Monday, April 20th, 2009

(Reprint)

We posted the following White Paper on our website in April of 2009 but felt compelled to repost in our new blog.  Not only did the market behave as we suggested it might over the last year but the specific strategies we recommended employing are arguably more important to implement  now (after the “bounce-back”  from over-sold levels)  than they were a year ago.

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Decision Investments believes that the recent strong performance in the stock market is finally signaling a legitimate end to the worst bear market in 70 years.  The stock market is considered to be a “leading indicator” and as such typically moves well in advance of the actual economy.  As of this writing, market indexes have moved more than 25% above their March 6th lows suggesting that the domestic economy is likely poised to strengthen over the next six to eight months.  

We do, however, believe that the stock market recovery will be long and arduous and that Dow 15,000 is a long, long ways away.  More realistically the major markets, after an initial “bounce back” from over-sold levels, will likely experience modest gains followed by a period of consolidation for the foreseeable future.  The ultimate goal will be to participate in the recovery to a greater extent than the decline and in doing so attempt to have investment accounts fully recover before the stock market has.

For likeminded individual investors who don’t want to passively wait while being at the mercy of the markets, Decision Investments suggests the following proactive strategies:

1. Dividends… Yield Matters

2. Tactical … Don’t “set it, and forget it”

3. Sector Bets… Be Industrious about your Industries

4. Concentration… Over-diversification is the enemy to performance

5. Bonds … The other white meat

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