Tactical investing

TACTICAL IN

VESTING

W H E N TO E

N T E R AN D E

X I T T

H E MA R K E T

DISCLOSUREThe investment club and its speakers are not

investment professionals. We provide information solely for educational purposes and the approaches presented may not be right for you. Any investments or techniques mentioned are for only illustration, not recommendations.

Investing involves risk so educate yourself before you invest.

YOUR SPEAKEREric Richter

Sr. Engineering SpecialistProduct and Process Assurance Department

Qualifications: a person who is playing investing catch up and probably has made every mistake he could. Yet he still is on the way to having a

modest retirement account.

LUCKFor many of us, making money in the stock market

seems to depend as much on when we were born and when we started investing as it does

on skill.

WHEN DID YOU START INVESTING?

Dot Com BubbleOf March 2000

Subprime MortgageCrisis of Of 2007-2008

WE DON’T CONTROL OUR BIRTH…But we can control when we invest or not invest

Most likely during our investment years we will experience a significant market downturn

And it is likely we might not recover sufficiently to meet our investment objectives

RATHER THAN BUY AND HOLD OR COUNT ON DIVERSIFICATION…

It might be better to get out of the market or switch to safer

investments when the market is crashing and wait for a better day

to enter the market

PREDICTING A MARKET CRASH?

Is it even possible? Aren’t the markets random?

The S&P 500 pattern shown earlier doesn’t look random.

BUT COULD YOU SEE A ONE DAY DROP?

Dot Com BubbleOf March 2000

Subprime MortgageCrisis of Of 2007-2008

Investors lost almost30% their money in a single day in 1987 and no one sawit coming.

Later we’ll see If there was a warning sign.

Black Monday, October 19, 1987

WHAT CAN YOU DO?Be aware of what the market is doing

each day. Get an app for your smart phone that will give you the

percentage change of the market.

Monitor your accounts at least once a month. Are you making what you

expect?

UNDERSTAND YOUR OPTIONSHow fast can you react if the market

drops suddenly? If you react too slowly, you will sell low and buy

high. That’s not good

Ask your financial advisers and money managers what they do with your money when signals turn negative

REVIEW OUR NEWSLETTERS MONTHLYVanguard Independent Adviser – usually

bullish and still is

Bob Brinker Marketimer – usually bullish but has been cautious about adding money to the market since the beginning of the year

Blue Chip Growth – usually bullish and still is

REVIEW INVESTORS BUSINESS DAILY (IBD)

Found in Section B of the paper

REVIEW INVESTORS BUSINESS DAILY (IBD)

Found in Section B of the paper

DELTA MARKET SENTIMENT INDICATOR

Sign up for free weekly emails of this indicator at www.deltawealthaccelerator.com

Usually 50% is the cutoff, but

they’ve employed a 3%

discretion. Options

expiration just occurred on 3rd

Friday

WHAT ABOUT OTHER INVESTORS LIKE US?

Join American Association of Individual Investors at www.aaii.com for $29 a year. Attend some AAII meetings.

The typical AAII member is a male in his mid-60s with a bachelor’s or graduate degree. AAII members tend to be affluent with a median portfolio size in excess of $1 million. The typical member describes himself as having a moderate level of investment knowledge and engaging primarily in fundamental analysis.

USING SIMPLE MOVING AVERAGES AS INDICATORS

To get simple moving averages, go to www.finance.yahoo.com Enter a stock or ETF like SPY in the quote lookup box and on the chart click on 1y.

GOLDEN CROSS OR DEATH CROSS INDICATORS

The idea is when the fast MA (10 period) goes below the slow MA (40 period) that’s bad (death cross). When the 10 period moves above the 40 period that’s good (golden cross). Some use a 50-100 day moving average but that may be too slow.

THE 75 DAY MOVING AVERAGE IS EVEN SIMPLER

Dot Com warning

Exit on red arrow. Re-enter on green arrow if other indicators support the move. NOTE: This method works best on an index rather than an individual stock

SEVERAL EXITS FOR THE SUBPRIME MORTGAGE CRISIS

It is better to use the equally weighted RSP rather than the SPY. Once out you might have noticed lower lows and lower highs and not re-entered until the crash was over

THE BLACK MONDAY WARNING

COMPARISON OF TECHNIQUES/OPINIONS  21-Mar 28-Mar 4-Apr 11-Apr 17-Apr

Brinker I I I I I Key I Market in correction, buy with caution

Vanguard C C C C C 

D Bearish

Navellier C C C C C 

C Bullish

IBD I D D D DDelta 61.7 59.1 57.3 55.1 48.1

75d C C C D C10/40 C C C C DAAII spread 10.6 2.5 8.6 -5.6 -7

TACTICAL TAKEAWAYS*• Focus on avoiding major losses rather than chasing

gains• Make decisions on a suitable timeframe, a week to a

month• Do not move incrementally• Use a repeatable, systematic, and disciplined method

for making tactical decisions• Hold your tactical investments in tax deferred

accounts  

*Win by not losing by Nicholas Atkeson and Andrew Houghton

IF THIS TALK SEEMS HELPFUL…Consider joining the investment club. It’s only

$12 a year. Contact Joe Barger Here’s what we provide:

Access to newslettersInvestment books for loan

Discounts to selected eventsSoftware for review