“SHORT” When “OUT” & “PROTECTION” While Staying “IN”
To achieve its best possible long-term performance, alphaplus is designed to see some drawdown (a decline in the investment or fund) before it signals to be “OUT” of the market. The average drawdown is typically ~9% from the S&P 500 and NASDAQ high of the previous ~45 days. Table 4 of the 30yr summary shows the Systems “OUT” performance and drawdown statistics for the entire period.
Money will have been lost prior to the “OUT” signal and the additional emotional aspect of switching to short or contra funds (funds that take a contrarian view on equities) in the amount described in the short box may be difficult. You should consider your tolerance for risk and what percentage is right for you and possibly ease your way into the short position. You might choose to dollar cost average into these positions (divide your dollar amount into 2,3 or 4 parts and invest them one part at a time every few days), but stay within your comfort zone.
The daily “12” summary sheet has a box labeled “short” and is adjacent to the “comp” (IN-OUT) box. The “short” box may show 3 different percentages: “0%”; “16%”, “33%. All of the Systems spreadsheets and documents that include the “16%” & “33%” signal are integrated and linked.
The short box will display “0%” when the System is “IN” and all investments are long.
The short box will display “16%” when the protection timing signal has met the criteria for buying protection. When protection is called for, longs are kept and 16% of total portfolio value should be invested “short” (ideally 8% in SH and 8% in SDS). If funds are not available, sell the poorest performing select sector funds, equal to the amount needed. This timing model advises to buy protection when a decline is sensed by a multi-array of views of market performance. Its signal is “16%”, for protection and the percentage gain or loss is included in the system performance.
It will display “33%” When the comp box goes to “OUT”. At that time, all “longs” are to be sold and a buy of 33% (6 buy units) of short index positions are made the day after all longs are sold as described in part 2 in the “How to Use” section. The other 66% should be held in a cash or a money market position.
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What Clients Are Saying About The alphaplus System
John T.
"Elegant in its simplicity, rich in its rewards, the alphaplus system achieves the goal of leaving you in the market in an uptrend, and generally not shaking you out when it whipsaws, and finally getting you out when there are serious downdrafts. alphaplus allows you to do what successful traders always state: that you make the most money by sitting on your hands. It also prevents the allure of attempting to outsmart the professionals by day- or swing-trading. All-in-all an ingenous “System,” based on numbers and not emotions or hunches."
Gabrielle B.
"When I switched companies and left my job at CBS, I didn't know what to do with my 401k. Then I was introduced to the alphaplus system and I rolled my 401k into an account using the alphaplus strategy. I have been earning a great return for the past 1 1/2 years. I also started accounts for both of my sons, which have increased very nicely in value over the past year. I'm so thrilled to have found alphaplus and appreciate all of ETF Sector Fund Investing guidance on how to invest for a better return on my 401k and savings for my children."
David L.
"Time and again the alphaplus method has proven successful, invaluable, and well-considered. The returns consistently outperform the market and most index funds. It is easy to follow and the daily summaries keep me up-to-date. The most important and impressive thing I can say is that several weeks before the crash in 2008 the system recommended that we sell our holdings and get out of the market. The S&P500 lost ~42 % after that call. That advice proved prescient and unparalleled, saving our family from devastating losses. I am forever a believer!"
