Is it is possible to beat the market over the long-term?

I then proceeded to show evidence that it was possible (not easy to do but possible if you know what you are doing) and I closed off by saying that today I was going to share with you what I believe is happening with the market right now and where my money is going to be invested going forward.

Because my clients pay thousands to follow my lead, I’m unable to give absolute specific fund details but what I can do is to give you two things of enormous value.

The first is what direction the market is heading in right now. The reason why this is valuable is because three out of every four stocks run in sync with the markets trend, and so getting the market trend wrong; however good your investment fund picking is; could be disastrous and very costly.

The second thing I am going to share with you is where the big money is flowing into right now, sectors that the investment funds I own are invested in, so that you too can find quality investment funds that are invested in these sectors.

Let’s start with the market.

Recently (2nd September) two of the market indexes experienced something very significant.

Both the Nasdaq Composite and the S&P 600 experienced what are known as follow throughs. A follow through is when one of the indexes rises 1.7% or more on volume that is higher than the day previous. Basically it means that the institutional investors that control 75% of future market direction are going ‘‘all in.’’

Follow throughs help to confirm a change of trend and because the market had been heading lower over three weeks prior to this event, it means there is a good chance it will start to head back higher.
In that recent 3 week pullback, because the S&P 600 bottomed (24th August) before the Nasdaq Composite (27th August), and the 600 made the largest gain on the follow through day (600 gained 3.77% vs Nasdaq 2.97%) the small cap index is the one to watch.

With investment funds, I see the big money being invested in investment funds that are either linked to China, natural resources and global resources. 

These are the sectors that helped me and my clients score a 62.9% gain in 2009. This year our portfolio has made little gains but the main thing is that we are still ahead of the market.

The market right now is acting extremely well plus at the moment its trading very close to the bottom of its present correction. If you share the belief of mine that we are in a bull market correction, and that the bull market has much further to run, you would probably agree that right now is prime time to invest.
September can often be a stinker for stocks, however the way the market and stocks have recently been behaving, things so far are looking positive.

But even if September does turn out to be a bummer for equities, because we are in year two of a new bull market, and the big gains are made in the first two years of a bull market, I have faith that as we move into the later months of the year, the market should flex its muscles and most probably make some pretty decent gains.

Until next my friend.

If you would like to get more detail about what you’ve just heard, you can request a FREE Telephone Consultation (£1,997 value) by simply contacting us.

As well as booking your free consultation, you can also obtain a FREE copy of my book Liquid Millionaire.

The number of telephone consultations (and free book giveaways) available is always limited so I suggest you get in touch right now.

You can email us or call 0870 757 8554 if you prefer.

In both cases you are under no obligation to do anything, buy anything or sign up for anything.

The answer is yes.

Is it easy to do?

No.

But is it possible?

Yes, absolutely.

Take a look at this image below and you will discover that my investment fund screening tool (called HIRE CAR™) has helped our clients to keep ahead of both the FTSE 100 and the Nasdaq Composite over the long-term.

Since January 1st 1999 to December 31st 2009, when compared to the FTSE 100’s price performance, the Nasdaq’s performance, and Cash ISAs, I have been fortunate to be able to outperform them all with the help of ISA Trend Investing and my investment fund screening tool called HIRE CAR™.

When you use HIRE CAR™ to find the best investment opportunities, you become invested in investment funds that own the market’s leading stocks.

These top stocks are companies that often blaze the trail northwards; ones that can sometimes make the biggest price moves. And because your chosen fund or funds own these leading stocks, as these leaders surge forward, the fund you own will also surge forward – and so will your Stocks and Shares ISA or SIPP account.

To clarify, if the big money is flowing into the USA, HIRE CAR™ will pick that up on its radar and then proceed to find the best of the best of the funds invested in the USA.

Or if the flow of money is going into one of the developing nations such as China, India or South America, HIRE CAR™ will spot that too and once again hone in on the very best funds, ones with the highest probability of performing well once you’ve bought them.

And the great thing about this is that you will be participating indirectly in the growth of the countries or continents where the serious money is flowing into – and have complete peace of mind knowing that your cash is held by a UK FSA regulated company and can be accessed whenever you wish.

In August I made no money in my ISA account but yet I ended the month with a big smile on my face. Why?

It’s because I beat the market by 6%. In other words, the Nasdaq Composite (the US technology index that I benchmark against) fell 6.2% and yet my account dropped just 0.1%.

Was this luck?

No, luck was not a factor here. What was important though was being positioned in leading investment funds – managed by quality fund managers – that currently hold some of the market hottest stocks.

In Friday’s blog I’m going to share with you what I believe is happening with the market right now and where my money is going to be invested. Make sure you read it because it could be very useful to you going forward.

Until next my friend.

If you would like to get more detail about what you’ve just heard, you can request a FREE Telephone Consultation (£1,997 value) by simply contacting us.

As well as booking your free consultation, you can also obtain a FREE copy of my book Liquid Millionaire.

The number of telephone consultations (and free book giveaways) available is always limited so I suggest you get in touch right now.

You can email us or call 0870 757 8554 if you prefer.

In both cases you are under no obligation to do anything, buy anything or sign up for anything.

The article started off really well, stating that it pays to keep your eye on the Nasdaq 100. I quote,  “...in a genuine bull market, the Nasdaq 100 – currently home to such giants as Apple, Google and Microsoft – usually outpaces the broader-based S&P 500.”

So how could an article that started off in a way that totally synced up with my investment philosophy all of a sudden totally conflict with my deep held beliefs about how the stock market works?

The answer is that Domenic believed that we are in a bear market (down market) where as I believe that we are in a bull market (up market).

Dominic didn’t say why he believed that we are in a bear market but here’s why I believe the exact opposite.

My belief that we are in a bull market comes from facts and not opinions.
As stock market legend Jesse Livermore once wrote, “Markets are never wrong–opinions often are.”

How the market works is how the market has worked since it began in the late 1800’s. It is always about supply and demand and the way to analyze supply and demand is through looking at price and volume action on stock charts.

And what the facts on charts are telling me right now is that we in currently in year two of a bull market that started in March 2009. Many people would say “yes, the market was strong in 2009 but this year it’s done nothing.”

And they’d be right because the market has done nothing. However, even though the stock market indexes are currently in a correction, the market is clearly still in a bull phase which started in March 2009. That means I see the markets year to date performance, and this current pullback as normal.

Let me explain why. Since March 2009 we’ve seen the Nasdaq Composite surge 100.2%, a triple digit gain which is a remarkable move in a short space of time.

And so a double digit correction off a 100% gain should be seen as a natural way the stock markets work. In other words, even in the strongest of markets, they have to rest every now and again to regain their strength ready for their next leg upwards hence why the market has not made any price progress so far this year.

To help you recall how strong this bull markets been so far, let me ask you a question.

Did you know that in the previous bull market (2003-2007) the Nasdaq gained roughly the same amount?

Yes it’s true. The Nasdaq made a 98% gain from March 2003 to October 2007. That means that in the last bull market it took four and a half years to make the same gain that it’s made in just one year! And so it’s no surprise to me that the market is resting and that we are currently in a retracement (correction) period.

And because the Nasdaq surged so much in such a short space of time, it tells you that right now, even though all the headlines (and many opinions) are doom and gloom, the facts don’t lie: we remain at the start of a very strong bull market.

Because bull markets last multiple years, it means if 2009 was year one, 2010 is year two. Here’s a reminder of two important elements that state how the stock market works:

    1. Bull markets tend to last between two and four years.

That means even though we are presently in a bull market correction period, we could have between one and three years left to run on this current uptrend.

    2. The big money is always made in the first two years of a new bull market.

That means even though the first half has been poor in performance related terms, 2010 could still turn out to be a good profit making year.

Until next my friend.

If you would like to get more detail about what you’ve just heard, you can request a FREE Telephone Consultation (£1,997 value) by simply contacting us.

As well as booking your free consultation, you can also obtain a FREE copy of my book Liquid Millionaire.

The number of telephone consultations (and free book giveaways) available is always limited so I suggest you get in touch right now.

You can email us or call 0870 757 8554 if you prefer.

In both cases you are under no obligation to do anything, buy anything or sign up for anything.

The article started off really well, stating that it pays to keep your eye on the Nasdaq 100. I quote,  “...in a genuine bull market, the Nasdaq 100 – currently home to such giants as Apple, Google and Microsoft – usually outpaces the broader-based S&P 500.”

This really was music to my ears because what Dominic said aligns with my own investment philosophy of how the market works.

Let me explain.

In my book Liquid Millionaire, I talk very specifically about how the Nasdaq Composite, the Nasdaq 100 and the chip sector all play a role in helping me to determine future market direction.

I say…“ If the market is rising but being led by the Dow or the S&P 500, meaning the Nasdaq, the Nasdaq 100 and the chip sector are lagging, this normally means that the rally (uptrend) is more prone to fail. But if the Nasdaq, the Nasdaq 100 and the chip sector are leading the market higher, that tells you the rally is more likely to succeed.”

And so how could an article that started off in a way that totally synced up with my investment philosophy all of a sudden totally conflict with my deep held beliefs about how the stock market works?

Rather than tell you now, I’ll save it for Friday’s blog. I think that you’ll be interested in what I have to say because if you are invested right now, I’m sure that if you are like my clients, you’ll want my take on the market.

Well I promise you that on Friday you will get a very decisive verdict, on the markets health, and which direction I believe it’s likely to head from here. Until next time my friend.

If you would like to get more detail about what you’ve just heard, you can request a FREE Telephone Consultation (£1,997 value) by simply contacting us.

As well as booking your free consultation, you can also obtain a FREE copy of my book Liquid Millionaire.

The number of telephone consultations (and free book giveaways) available is always limited so I suggest you get in touch right now.

You can email us or call 0870 757 8554 if you prefer.

In both cases you are under no obligation to do anything, buy anything or sign up for anything.

Because I think that this information is so valuable to you, I thought it was best repeating one more time.

On the show that boasts a 23 million viewer audience, I was asked about what my take was on the market.

As well as explaining what I thought, I also explained what the rationale was behind my thinking. I believe my thoughts on the day of the interview about which direction the market was likely to head will be extremely useful to you as an investor.

I also think you’d enjoy hearing what I had to say about what I’m personally investing in right now.

Rather than spoil the surprise, I thought it best for you to take a look at the clip in its entirety. The clip is short, sweet and straight to the point.

Enjoy!

Until next my friend.

If you would like to get more detail about what you’ve just heard, you can request a FREE Telephone Consultation (£1,997 value) by simply contacting us.

As well as booking your free consultation, you can also obtain a FREE copy of my book Liquid Millionaire.

The number of telephone consultations (and free book giveaways) available is always limited so I suggest you get in touch right now.

You can email us or call 0870 757 8554 if you prefer.

In both cases you are under no obligation to do anything, buy anything or sign up for anything.

On the show that boasts a 23 million viewer audience, I was asked about what my take was on the market.

As well as explaining what I thought, I also explained what the rationale was behind my thinking. I believe my thoughts on the day of the interview about which direction the market was likely to head will be extremely useful to you as an investor.

I also think you’d enjoy hearing what I had to say about what I’m personally investing in right now.

Rather than spoil the surprise, I thought it best for you to take a look at the clip in its entirety. The clip is short, sweet and straight to the point.

Enjoy!

Until next my friend.

If you would like to get more detail about what you’ve just heard, you can request a FREE Telephone Consultation (£1,997 value) by simply contacting us.

As well as booking your free consultation, you can also obtain a FREE copy of my book Liquid Millionaire.

The number of telephone consultations (and free book giveaways) available is always limited so I suggest you get in touch right now.

You can email us or call 0870 757 8554 if you prefer.

In both cases you are under no obligation to do anything, buy anything or sign up for anything.

Do you think that sort of 12 month performance excite you?

If it would, then you are going to love what I have to share with you.

Last week I began sharing with you our secret to how we’ve managed to beat the market over the long-term.

I stated that the answer lay in three key things.

1. Knowing which direction the market is likely to head.
2. Knowing how to find high quality investment funds.
3. Knowing when to buy and sell these funds at the most opportune times.

Last week we covered point 1 on the list, Knowing which direction the market is likely to head and on Wednesday we covered point 2, Knowing how to find high quality investment funds.

Today we are going to cover the third and final point which is Knowing when to buy and sell these funds at the most opportune times.

When to buy and sell

Let’s start by talking about exiting.

By looking at price and volume action, whenever the market changes from an uptrend (bull market) to a downtrend (bear market), you switch out of the market into a cash-based fund.

You do a “switch” from the investment fund or funds you are invested in, into a cash-based fund such as the Fidelity ISA Cash Park.

You then wait in the Fidelity ISA Cash Park until the market is deemed healthy again. This is when the downtrend officially becomes an uptrend.

You determine market health and direction by reading the market’s price and volume action.

Let’s move onto buying. 

The first thing I do before even considering buying is to make sure that the market is confirmed “healthy”.

I do this by analyzing charts.

Once I’m happy that the market is in an uptrend, again I’d only consider buying if the fund can then successfully break out past its “pivot” or ideal buy point.

When you are buying a fund, you can keep commission and switching costs extremely low by using a fund supermarket such as Fidelity’s FundsNetwork™.

If you don’t go through a fund supermarket you might end up paying as much as 5% in commission fees. That means that your fund would have to go up 5% just to get back even.

When you buy through a fund supermarket such as Fidelity’s FundsNetwork™, it means that you have the option not to use a financial adviser – meaning you save even more commission fees.

This can really help over time because the difference between getting 12% per year and 15% can be huge.

Here’s an example of what I mean.

Let’s say that we have two couples, the Browns and the Smiths.

The Browns and the Smiths both invest in exactly the same investments as one another over a 20 year period. The only difference is that the Browns use an IFA to place all the trades, and the Smiths place the trades themselves using a fund supermarket.

Because of this one difference, the Smiths end up getting an average annual return of 15%. The Browns – because they are paying a 3% commission to their IFA each year, end up with a 12% annual return.

With their 20 year financial plans, both start from zero but make a decision to put in the full £20,400 ISA allowance each and every year. Here’s what happens to their money.

Browns (using an IFA) make 12% per year

Smiths using a fund supermarket make 15% per year.

As you can see, at the end of the 20 year period, the Browns have a pot of £1.7 million.

But the Smiths at the end of their double decade period have £2.58 million.

Even though the two couples invested in exactly the same investments, because one couple used an IFA, the difference is close to eight hundred and eighty thousand pounds – or an average of £44,000 in commissions per year.

The lesson is clear. Using a fund supermarket can help you fight for every single percentage point, which in turn means more money in your pocket instead of an adviser’s or brokers.

What I love about FundsNetwork™ is that you can buy into an investment fund for just 0.25% and you can switch into their ISA Cash Park for no charge at all.

So now you know how we managed to get a return of 62.9% in 2009 when the average wealth management company returned 21%.

Until next my friend.

If you would like to know more about how we manage to beat the market over the long-term, and request a FREE Telephone Consultation (£1,997 value) or obtain a FREE copy of my book Liquid Millionaire, get in touch.

You can email us or call 0870 757 8554 if you prefer.

In both cases you are under no obligation to do anything, buy anything or sign up for anything.

Do you think that sort of 12 month performance excite you?

If it would, then you are going to love what I have to share with you.

Last week I began sharing with you our secret to how we’ve managed to beat the market over the long-term.

I stated that the answer lay in three key things.

1. Knowing which direction the market is likely to head.
2. Knowing how to find high quality investment funds.
3. Knowing when to buy and sell these funds at the most opportune times.

Last week I began with point 1. Knowing which direction the market is likely to head.

This week we are going to move onto point 2. Knowing how to find high quality investment funds.

How to Find High Quality Investment Funds

What do you know about investment funds? In case you are unsure, an investment fund is a pooled investment vehicle that allows investors like you and me to invest in the stock market. They are controlled and managed by a professional investor who is called a fund manager.

These fund managers buy stocks (companies) that they believe are going to rise in value. If they choose well, the fund’s value will do well and all the people invested in the fund will be rewarded with an increase in their investment portfolio.

Investment funds are the investment vehicles that have the power to grow your account at 12% per year if you choose well. Investment fund managers are like football managers. If you can find a fund manager with an outstanding track record you’ve cracked it. The challenge is that in the UK there are over one thousand ISA funds to choose from and so unless you know what you are doing and how to check various performance gauges, it is very easy to pick a dud fund.

One website that I like to use frequently to help me quickly find potential winning funds (and it’s free) is called Morningstar. You can find it by going to http://www.morningstar.co.uk

To explain what I mean about the similarities of investment fund managers and football managers, I’ll use British football manager, Sir Alex Ferguson as an example.

Let me ask you a question.

Sir Alex Ferguson is renowned for having a great track record. What are the chances that he will do well next season?

The answer is, he will probably do well. Of course, there is no guarantee, but the probability of him performing well next season is pretty high.

That same principle applies to fund managers. In other words, when fund managers have great track records, they are also likely to keep doing well in the future.

In Friday’s blog, we will complete this lesson by looking at the third and final point, which is:- Knowing when to buy and sell these funds at the most opportune times.

Until next my friend.

If you would like to know more about how we manage to beat the market over the long-term, and request a FREE Telephone Consultation (£1,997 value) or obtain a FREE copy of my book Liquid Millionaire, get in touch.

You can email us or call 0870 757 8554 if you prefer.

In both cases you are under no obligation to do anything, buy anything or sign up for anything.

It highlighted the poor performance returns of thirty three wealth management companies and featured big heavyweight names like JP Morgan Private Bank, Cazenove Capital Management and Rothschild Private Banking and Trust.

The average annual return for 2009 on “equity risk” portfolios of the thirty plus companies was 21%.

So how did we at ISACO manage to clock up a 62.9% gain for 2009?

The answer lies in three key things.

1. Knowing which direction the market is likely to head.
2. Knowing how to find high quality investment funds.
3. Knowing when to buy and sell these funds at the most opportune times.

Let’s start with the first of the three.

Knowing which direction the market is likely to head.

One of the best ways of reading the market is to look at charts. A stock chart is a graph that displays the price and volume history of a given security or index over a period of days, months or even years.

Price and volume charts help you to see what the professionals are doing so that you can follow in their footsteps. Whether they are buying or selling, through a chart you can see what they are doing by simply looking at the price and volume action. Price action is how a stock or index changes in price. Volume action tells you the number of shares that have been traded.

For example, if volume is far above its average and the price action is up, the professionals are buying. On the other hand, if the volume is far above average and the price action is down, it means that the professionals are selling. Lack of volume combined with prices moving up indicates little demand from the professionals. This is viewed as unhealthy action.

Lack of volume combined with prices moving down means that the professionals are reluctant to sell. This type of action is viewed as healthy action. By watching the market every day, and keeping a close eye on price and volume action, you can determine exactly what the professionals are doing with their money so that you can do the same.

Below are four images. They show the difference between healthy price and volume action and unhealthy price and volume action.

Healthy Price and Volume Action

Unhealthy Price and Volume Action

It is also important for you to understand that it takes a lot of buying or selling to confirm that the trend of the market has changed.

For example, if the trend of the stock market is up, it takes a lot of selling to change the trend from up to down. By measuring how much selling is going on over certain time periods, you can determine when the trend is about to change or has changed and you can then act accordingly ie; switching some, or all of your holdings into a cash based fund such as the Fidelity ISA Cash Park.

Reading the market’s health gives you inside knowledge of future market direction and if the market’s health has become sickly, it tells you that if you stay invested, your investments have a high probability of dropping in value.

It is helpful to be aware that it’s impossible to time getting out at the very top of the market or getting in right at the very bottom.
To help me read stock market direction using price and volume, I like to use Daily Graphs which costs about £600 per year. However if you are on a budget, the best free resources are as follows:

StockCharts.com www.stockcharts.com
Yahoo Finance www.uk.finance.yahoo.com/ 

In next week’s two blogs, I’ll fully explain the other two key elements that went in how we managed to score 62.9% in 2009.

Those 2 elements are:

1. How to find high quality investment funds.

2. How and when to buy and sell at the most opportune times.

Until next my friend.

If you would like to know more about how we manage to beat the market over the long-term, and request a FREE Telephone Consultation (£1,997 value) or obtain a FREE copy of my book Liquid Millionaire, get in touch.

You can email us or call 0870 757 8554 if you prefer.

In both cases you are under no obligation to do anything, buy anything or sign up for anything.

Does that sort of 12 month performance excite you?

If it does, then you are going to love what I have to share with you.

I read in a recent Financial Times Money Guide an article written by Steve Lodge that began with the headline “Cautious managers fail to catch recovery in the markets.”

It highlighted the poor performance returns of thirty three wealth management companies and featured big heavyweight names like JP Morgan Private Bank, Cazenove Capital Management and Rothschild Private Banking and Trust.

The article shocked me because I discovered that out of all the management firms featured, the average annual return on “equity risk” portfolios for 2009 was just 21%.

To some this may seem like a reasonable return but when you look at the bigger picture and cast your mind back to 2008, most people were sitting in huge losses going into 2009 especially with the Nasdaq Composite falling 40%.

And so when you look at it with different glasses on, a 21% rebound would have nowhere near been enough to help recover all their 2008 losses.

So how did we at ISACO manage to clock up a 62.9% gain for 2009?

The answer lies in three things and I’m going to tell you all about them on Friday.

Until next my friend.

If you would like to know more about how we manage to beat the market over the long-term, and request a FREE Telephone Consultation (£1,997 value) or obtain a FREE copy of my book Liquid Millionaire, get in touch.

You can email us or call 0870 757 8554 if you prefer.

In both cases you are under no obligation to do anything, buy anything or sign up for anything.