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Investor Psychology Monetary Conditions Market Valuation Market Trend Jeff Hays President Hays Advisory, LLC.

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Presentation on theme: "Investor Psychology Monetary Conditions Market Valuation Market Trend Jeff Hays President Hays Advisory, LLC."— Presentation transcript:

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2 Investor Psychology Monetary Conditions Market Valuation Market Trend Jeff Hays President Hays Advisory, LLC

3 So What Do We Do Now? Investor Psychology Monetary Conditions Market Valuation Market Trend For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.

4 Market Trend Analyzer – Investment Phase When in the Investment Phase: Focus on the long-term moving average Asset allocation decisions are determined by the AAM For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material. Short Term Medium Term Long Term

5 Market Trend Analyzer – Trading Phase Short-term and Medium-term moving avg. breaks through Long-term moving avg. Raise 30 – 40% Cash Focus shifts to action of the shorter-term moving avgs. For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material.

6 Market Trend Analyzer – Trading Phase For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material. Short-term moving avg. turns up - purchase 15 – 20% in ETFs Hold 15 – 20% Cash Short-term moves through medium-term m/a. - purchase addl 15 – 20% in ETFs Hold 0% Cash

7 Market Trend Analyzer – Investment Phase For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material. Remain in trading mode with up to 40% of the portfolio in ETFs Short-term and Medium term moving avg. above the Long-term moving avg. Gradually replace ETFs with individual stocks/0% Cash

8 Market Trend Analyzer – 1929 Excessive Margin! Extremely Overvalued - P/E ratio of 32.6 For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material. S&P

9 Market Trend Analyzer DJIA crosses 1,000 – Investors Bullish? Yield Curve inverted Nifty Fifty - Xerox - 49 times earnings, Avon - 65 times earnings, Polaroid - 91 times earnings. For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material. S&P

10 For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material Bear Market 50% Cash 23% 30%- 40% AAM Recs. 0% Cash Q Q Greedy investors Tight monetary policy Overvalued LTG Recommended Asset Allocation 50% Stocks 25% Bonds 25% Cash 0%

11 The Anomaly For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material. S&P Asset Allocation 100% Stocks 0% Bonds 0% Cash

12 Back-tested Performance* We back-tested the DJIA from and the S&P 500 from 1930 – 2009.* For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material. Past performance is no indication of future results. Cash Levels Decade Max Drop Annual Return (If Trade <= 1 Year Actual Return) % 7.8% % -12.0% % 7.8% 80s/90s

13 Summary For Illustrative Purposes Only. We are not soliciting or recommending any action based upon this material. We believe the market trend analyzer is a great compliment to our current asset allocation model. We are currently using it as a guide and we will fully implement it once it recommends we go back to a fully invested stance. It is not perfect and will cause some occasional false alarms, but we believe it will add significantly to our results over the long-term.


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