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Subject:  Fun with Funds Date:  5/30/2020  5:40 PM
Author:  Arindam Number:  18062 of 18064

The following is just notes to myself, not "investment advice". So do your own Due Diligence. That said, I "eat my own cooking". In Chapter 9 of his classic intro to technical analysis, Weinstein argues the following:

"Most investors view mutual funds as very long-term investments that should be bought and locked away through thick and thin. This is foolish. Once you know how to time major moves, why in the world would you want to sit through a Stage 4 bear trend?"

Aside: Stein and Demuth make the same argument in their book on market-timing, as did the greatest investor who ever lived, Jesse Livermore, in his own comments on investing/trading, namely, that it is really, really stupid to let prices move against you when it is so easy to limit the damage by exiting when the market itself is telling you to exit. OTOH, jumping in and out at the least hint of trouble just creates self-fulling troubles. So you've gotta decide how you're going to decide what is just 'normal market noise' and what is 'information worth paying attention to'.

For Stan, that means a cross of weekly prices above/below a 30-period MA. Stein and Demuth use other length MAs. I like Keltner Channels, or MACD, or StochRSI. Everyone will have their own favorite indicators, and it really doesn't much matter what is used as long as their use is rational and consistent and these two thoughts are kept in mind: (1) nothing will capture every 'good' trend present in a time-price series and avoid every 'bad' one, because --as a Buddhist or Taoist would say-- "a way of seeing is also a way of not seeing", and (2) genuine 'price shocks' --as opposed to the likely consequences of obvious warning signs-- are impossible to forecast.

There are dozens of places that offer charting and the means to track a watchlist or portfolio. The four I use most are FreeStockCharts, BarChart, StockChart, and Yahoo Finance. There are dozens of places that offer mutual fund scanning, analysis, and execution. I think the easiest is Schwab.

Open-end mutual funds don't report volume and only price EOD. That simplifies the charting palette. So your chief choice is whether to try to capture the trends offered by using daily bars or weekly ones. In classic Dow theory, the 'waves' vs the 'tides', and a case can be made for doing either. In fact, a case can be made for doing both. A sample timing template.

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