So, we gave you the mother-load of Rules last week; If you invest in equities in a Bear Market, you WILL LOSE MONEY—SO DON’T. Rule #1 (read it for more details..).
And to re-cap, why rules, well, Rules will set you free. If you can become a disciplined investor, then half of your investing battle is won. DISCIPLINED=RULES. The other half of the battle, is removing the EMOTION from investing. This is a bit tougher, but RULES certainly are the foundation for doing so!
At Alphavest we are giving away the milk for free. YEP. That’s the way of the Movement…The Liberated Movement. In an effort to demystify the noise for investors and and help them break free from Wall Street’s games, we are publishing our Investing Rules so that investors can break free.
IF: An Asset Class (bonds, equities, commodities, currencies) is underperfoming CASH….
THEN: DON’T invest in it. In today’s terms this Rule applied means, don’t own commodities in your portfolio, AKA the commodity du jour: GOLD)
Our friends at Dorsey Wright & Associates publish, daily, the relative strength of the Asset Classes listed above visa vie how they are performing to Cash. Here’s what the line up looks like right now, in order of #1 Performing to #6/worst performing:
Again, what does this mean right now? BE VOID ALL COMMODITIES IN YOUR PORTFOLIO. AKA: GOLD, amongst others.
How has this worked since Commodities traded places with Cash in the line-up to become the worst performing sector or #6 on 6/21/2012? Gold is down over 15% since then, matched to the S&P being up over 26% over that same timeframe….this is a more than 50% difference in performance.
Rule #2 is a simple as V-O-I-D. Don’t subscribe to the buy all the market so as to be diversified; the days of the Modern Portfolio Theory pie charts are OVER. If an asset is performing worse than cash, why own it? Be VOID assets that don’t perform better than cash and/or are in last place on the Asset line up.
Stay tuned for Rule # 3, next week.
Have investing rules of your own? We would love to hear from you! If we publish a Rule of yours, we will offer 1 quarter of no management charges! Fire away!