What observations can you make about the market?
Markets Go Up
Over long periods of time, stock markets go up in value
Markets Correct
Occasionly, the market goes into a correction but recovers over time
Markets Oscillate
Look closely and you will notice that markets oscillate
Our model considers the three observations listed above. The first observation is that markets go up over the long term which drives us to bet on the upside of the market. The model doesn’t bet on the market corrections, only long-term growth. We also do not use hedge funds or any sophisticated investment strategies.
Second, markets do correct from time to time. Although rare, the model has a series of overrides that look for a correction. For example, volatility is a measure of the turbulence of the market looking 30 days out. The more volatile a market is, the greater the odds of a correction. Like COVID-19, not all corrections can be predicted using indicators.
Finally, the market oscillates which means the market moves into periods where it is over sold or over bought. We use several indicators to help us see this oscillation in order know when to jump into the Stock Market and when to jump out. No model is perfect, we just hope to catch as many waves as possible.
