Market Timing: Empirical vs. Emotional
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Unlike the popular buy-and-hold strategy, you would have substantially appreciated your investment capital during the millennium bear market by employing purely empirical market timing. As the models' performance demonstrates, Marketpolygraph has generated exceptional investment performance in every single year since 1999.

All historical performance results reflect the following:

  • Marketpolygraph research more than pays for itself—typically well within the first quarter of membership: private investor monthly subscription fees and discount trading commissions are included in all performance calculations i.e. understating returns by at least 2-3 percentage points.
  • Dividend and savings interest income (where applicable) are excluded from performance data calculations.
  • Transactions for QQQ, IWM and SPY are all executed on the same day a given Marketpolygraph QQQ research notification is issued.
  • Prior to Marketpolygraph's first live call in August 2004, average intraday share pricing is employed in order to realistically allow for delays in order execution: in addition to initial buys or shorts executed at the average intraday price, any given long position is not exited at the top of the day's trading range, and any given short is not covered at the bottom of the day's trading range.
  • ETF transaction size = 1000 shares.
  • As an example, an analysis of reinvested trading profits is included in the second and third tables below.
  • As found in the third table, the QQQ model is assessed for performance when 150 and 300 shares constitute the initial allocation of trading shares.
  • Given the time-tested predictive efficacy of Metatechnical Theory, the use of leveraged long/short ETFs has become increasingly central in determining our performance results—an inevitable outcome given the widespread adoption of leveraged ETFs in global markets. Neverthless, transactions that exceed the specified limit (i.e. 1000 shares in the first two tables and 150 and 300 shares per the last table) are excluded from the performance review as this would otherwise overstate our performance results.

Historical Performance
As confirmed by the Theory, performance returns are maximized when a given trading vehicle most closely correlates to an underlying stock market index. By and large, the following yearly performance returns associated with the QQQ ETF clearly underscore its superior market correlation. Furthermore, the returns associated with both the IWM and SPY markets allow for an additional degree of diversification if so required. As stated earlier, the table below represents yearly ROI performance based on block trades of 1000 shares:

Historical ETF Performance Returns
Year QQQ IWM SPY Closed Long Cash
1999 82.1%* N/A 15.7%* 4 4 21
2000 116.1% 46.1%* 26.3% 9 5 9
2001 87.4% 62.0% 48.5% 4 2 6
2002 61.2% 37.8% 28.3% 5 3 7
2003 41.3% 63.1% 33.8% 5 4 5
2004 55.0% 50.9% 28.6% 13 7 7
2005 19.5% 17.1% 15.7% 10 6 16
2006 22.0% 7.8% 3.6% 10 6 9
2007 31.8% 4.1% 8.3% 7 5 13
2008 0.0% 0.0% 0.0% 0 1 2
2009 13.11% 5.16% -10.89% 11 5 1
2010 29.91% 24.88% 11.72% 4 1 38
2011 59.92% 56.30% 42.51% 6 4 33
2012 0.00% 0.00% 0.00% 0 0 3

Historical performance notes:
  • A clear majority of trades have been issued as long recommendations.
  • At approximately 1 week in duration, 2009 saw the fewest reversions to cash.
  • Correctly anticipating market weakness in Q4 of 2008, the single open position only became fully weighted at this time.
  • The 2012 trading year saw its single trade go offside. As a result of the drawdown the trade remained open into 2013.

Example A: 2004 Performance with 1000 Shares
The following two examples taken from 2004 clearly demonstrate the efficacy of Marketpolygraph's precise timing research. Some additional noteworthy performance highlights to consider:
  • Since 1999, our ETF timing outcomes have realized a geometric mean exceeding 45% on a yearly transactional base that has yet to exceed 13 closed trades.
  • Winning trades accuracy since 1999 › 85%
  • Probability of being invested in the market at any given time › 70%

ETF Performance Comparison
Fixed trading amount Reinvested profits Fixed trading amount Reinvested profits Fixed trading amount Reinvested profits
YTD Trading Profit ($USD)
$20,064 $26,125 $57,014 $69,748 $31,764 $35,484
YTD % Return (ROI)
55% 72% 51% 62% 29% 32%

Example B: 2004 Performance with 150 and 300 QQQ Shares
As noted in the following table, a significantly lower initial account balance nevertheless delivers substantial results, and like the preceding table above, the performance results below incorporate all Marketpolygraph research employed throughout 2004:

QQQ Performance
  Fixed trading amount Reinvested profits Fixed trading amount Reinvested profits
YTD Trading Profit ($USD) YTD % Return (ROI)
150 Shares $2,002 $2,507 37% 46%
300 Shares $5,189 $6,675 47% 61%

Once again, both the ROI and Net Profit figures above are fully cost-adjusted—they include all discount brokerage commissions** and all Marketpolygraph monthly private investor fees (which may be significantly less than many banks' trading commissions).


*QQQ trading commenced on March 10, 1999 and our first research notification followed on April 21, 1999—applicable to QQQ and SPY models only, as IWM trading commenced on May 26, 2000 of the following year. The first general research notification applicable to all three ETF models followed very closely thereafter i.e. May 30, 2000.

**In the interest of maximizing your returns, please consider opening an on-line discount brokerage account with shorting capability, such as a TD AMERITRADE (U.S.A.) or TD Waterhouse (Canada) account, either of which would take a week or so to set up in order to best complement your Marketpolygraph membership. Depending on your present situation, you may consider initiating your Marketpolygraph membership in advance of your discount brokerage account if it proves more convenient to do so.

A Vulnerable Environment

"Stocks’ volatility since their seismic 2008 meltdown is pushing many people into poor, knee-jerk, market-timing decisions...In the past three months alone, the Standard & Poor’s 500-stock index has experienced 2% plus-or-minus swings on more than half of the trading days…"
Jonathan Burton
December 9, 2011


"'Investors really need to be more prepared for a higher frequency of financial shocks than we have seen in the past...'"
Richard Smith, President
Capital Advisory Group
The Wall Street Journal
March 5, 2011


"'Now it is much more challenging overall for any investor to make money like they did 10 years ago in the plain-vanilla U.S. markets.'"
Robert Iati, Partner
The Tabb Group
April 21, 2008


"Prices in liquid asset markets can change astonishingly abruptly without any new information that might justify the repricing."
Krishna Guha
October 18, 2007


"'Some people will get killed in this stock market and other people will get frightened, and everybody will swear never to do this again, and yet they will.'"
Peter Bernstein, President
Peter L. Bernstein Inc.
August 22, 2007


"'Who cares about the fundamentals? The great thing about the market is that it has nothing to do with the actual stocks.'"
Jim Cramer
Author and TV Personality
March 20, 2007


"Investors in stock mutual funds over the 20-year period ended 2005 have averaged annualized gains of 3.9% compared with 11.9% for the S&P 500 index due to poor timing decisions, according to a new study by investment research firm Dalbar Inc."
John Spence
May 24, 2006


"History has shown that periods of unusually low volatility in the equity markets are often followed by years of rising risk. So tighten your seat belts. We may be due for a bumpy ride."
Paul J. Lim
February 5, 2006


"One thing I've learned from long that very few of America's 95 million investors are psychologically strong enough to be successful traders; 99% will lose like they did in the 2000-2002 bear market."
Paul B. Farrell
June 5, 2005


"Over the long-term, few managers can outdo the overall market. In fact, only 4% of stock funds beat Standard & Poor's 500-stock index over the past decade."
Erin Burt
August 27, 2003


"...Those who have the tenacity to stick through 50 to 85 percent losses (1973-1974) or 80 to 90 percent losses (1929-1930) and not panic...also have to wait about 15 to 25 years to get back even."
Bruno Giordano
May 1999


"'You're dealing with a lot of silly people in the marketplace; it's like a great big casino and everyone else is boozing.'"
Warren Buffet, Chairman
Berkshire Hathaway
April 30, 1974
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