Why haven’t we had more buy signals? Surely there are some stocks trending in the market almost every day.
We started receiving questions like this one in the late summer of 2014 and 2015. And the answer is YES there are trending stocks almost every day. However, Stock Trend Spotter has two objectives:
1. Help you grow your portfolio conservatively; and 2. Help you protect your principle.
Some people like to climb the face of mountains and others like to snowboard down…and some even skydive off cliffs. They like the adrenaline rush of risk.
We Love Trends. We don’t like Spikes, Chasms or Cliffs. Too much risk. And during this period that is what we were seeing in the market. According to Keith Fitzgerald, market analyst, we are “on the heels of the worst market volatility in 20 years…”
“LIMIT LOSSES – ride profits irrespective of all other rules.” Richard D. Donchian, one of the most respected technicians on Wall St. in his ‘Twenty Trading Guides’.
This is the essence of Stock Trend Spotter.
The only way to eliminate losses in the stock market is to not invest in the market at all. We believe in the market, but we also believe you can and should limit losses.
And so, in addition to looking for trending stocks, STS also assess the market in general. And when the assessment indicates that it is not a favorable market to be Buying into STS don’t issue Buy Signals.
Fall 2014 – An Excellent Example
The summer of 2014 and last month are excellent examples. For the first 9 months of 2014, the major indexes and our Models were pretty much in lock step. But when the market began to slow in September and retreat in October we were Selling and Not Buying.
As a result, the market took investors on a wild roller coaster ride and they may be facing more risk ahead. While our strategies are almost completely in cash with little risk of a further decline, and ready to go back into the market when conditions warrant.