Welcome to TimingCube.com! TimingCube offers a stock market QQQ timing service for long-term investors. It provides a buy and sell timing signal for QQQ trading or investing in Nasdaq 100 mutual funds (Rydex, Profunds). It dramatically outperforms Buy and Hold QQQ investing.
Welcome to TimingCube.com! TimingCube offers a stock market QQQ timing service for long-term investors. It provides a buy and sell timing signal for QQQ trading or investing in Nasdaq 100 mutual funds (Rydex, Profunds). It dramatically outperforms Buy and Hold QQQ investing.

January 23, 2004 Update

 
 Signal Update
Current Signal Performance as of 01/23/2004
Signal Type
Trade Date
Index
Return since issued
Buy
04/03/2003
Nasdaq 100
+43.04%
Russell 2000
+58.43%
S&P 500
+29.44%
QQQ
+42.68%

Cumulative Returns since First TimingCube Live Signal (06/18/2001) as of 01/23/2004
Index
Long Only
Long Only
with
Margin
Long & Short
Long & Short
with
Margin
Buy & Hold
Nasdaq 100
+97.96 %
+235.95%
+264.87%
+914.80%
-10.56%
Russell 2000
+104.70%
+249.86%
+210.59%
+646.41%
+20.48%
S&P 500
+46.47 %
+102.21%
+115.11%
+ 316.99%
-6.06%
QQQ
+98.21%
+237.03%
+266.40%
+923.18%
-10.86%

Note: QQQ returns are included for continuity sake.

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 Market Update
Markets took a breather this week. This is not at all surprising, given the strong gains that all major indices enjoyed since mid-December and it is ultimately healthy. Bucking the trend, the Russell 2000 managed to close the week with a 0.97% gain. The S&P 500 stayed basically flat, with a gain of 0.19%, while the Nasdaq 100 and QQQ finished the week 1.45% lower. Q4 2003 earnings reports have been very positive so far and many more companies are scheduled to release their numbers next week.

Our Model did not detect any changes in the underlying trend and our current Buy signal is still in effect.

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 Trend Timing School
Diversification options

Diversification is a key tenet of the Trend Timing risk management discipline and should be part of every investor's strategy. The simple definition of diversification is to include an assortment of investments in a portfolio in order to limit the exposure to any one of them going bad. There are however many types of diversification:

Asset diversification. This is the theory that one should place their financial assets in diverse areas such as real estate, stock market, collectibles, precious metals, etc. We do not offer recommendations along these lines.

Strategy diversification. Since no system is perfect, this seems like a wise proposition. We frequently get asked "how much of my money should I invest according to the TimingCube Model?" The answer is highly personal, and since it depends on your specific circumstances, your style and risk tolerance, and your level of trust in our system, we cannot answer the question for you. For our own investments, we refuse to risk any money on strategies that have poor track records, such as Buy and Hold. Instead, we follow our own signal with the majority of our moneys using a blend of strategies described in the "Our Service" page.

Portfolio diversification. The conventional wisdom that evolved in tandem with Buy and Hold is that you should spread your portfolio amongst negatively correlated (i.e. which move in opposite directions) investment vehicles, so that when one goes down - like your stocks during a bear market - others will go up. We reject any method which guarantees mediocre returns by watering-down the best performers with losers.

Instead we advocate the Trend Timing Model which enables us to commit substantially all of our serious money to the stock market, and benefit in both up or down markets. For diversification we favor index-tracking investment vehicles which represent broad baskets of stocks. In addition, we prefer to distribute amongst several indices. As described in the FAQ of the Week below, our research has verified the high correlation between major stock market indices - both U.S. and international - when applying our Trend Timing Model. While the indices move in unison, they represent different facets or segments of the broad market and exhibit changing relative strength over time.

As a conclusion we encourage splitting your investments amongst vehicles that track the Nasdaq 100, Russell 2000 and S&P 500, and to consider adding others based on international indices.

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 FAQ of the Week
Question: Does the same signal work with all the U.S. and international indices?

Yes. In last week's Trend Timing School editorial, we explained why our Model does not require individual signals for each of the three major indices we track - the Nasdaq 100, Russell 2000 and S&P 500 - but we failed to make it perfectly clear that the one single Model and signal also applies to all the other U.S. and international indices. For further explanation and a visual illustration of the high correlation between our Model and various indices, please read the Trend Timing School article.

Warm wishes and until next week.

The TimingCube Staff

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