John Davenport , Ph.D., is a regional portfolio consultant for Invesco PowerShares Capital Management LLC.
Fred Meissner is president of the Fred Report, which provides financial market research based on technical analysis.


Discussion

Raymond Rimkus from IL posted 6 months ago:

Can't wait for the "the separate discussion for another research effort" TIMING OF THE SECTORS" Now we are left hanging here after giving us a taste of what I consider an interesting investment approach Help Thanks


David from NewJersey posted 6 months ago:


I am a small investor investing only in dividend paying stocks PFE, T, SO are 3
I currently own for the long term. I collect
the dividends they pay and then re-invest for
more shares. A great way to invest....


Alice Hunt from MI posted 6 months ago:

A timing article would be helpful, I agree. Also, are we to assume that the rotation order is the order from top to bottom of sectors on this chart?


Peter Vaughan from ID posted 5 months ago:

How to the small-cap stocks perform when GDP is falling and unemployment rising?


Bruce Stocker from Tx posted 5 months ago:

Interesting study helps validate my recent (previously puzzling) return experiences.


Ludwig Kuttner from AZ posted 5 months ago:

It appears that one's risk tolerance no longer needs to extend for the 15 year period described by Hanna and Chen.

The performance of the shadow stock portfolio illustrates that very nicely.

Is there a sector strategy in the selection of that portfolio?


Charles Rotblut from IL posted 5 months ago:

Hi Ludgwig,

The criteria we use for the Shadow Stock Portfolio can be found here


Jay Lagree from DE posted 5 months ago:

@ Raymond: Lots of info available on sector timing and yield curve. Start with http://www.aaii.com/journal/article/dont-fight-the-fed-interest-rates-and-their-impact-on-the-stock-market

There is even an investment strategy using sector ETF's similar to "Dogs of the Dow". Read about it in Technical Analysis of Stocks and Commodities. Jan 2014 P.36: "Outperform the Market With Sector ETFs".

I have been following the Shadow Stock strategy since 1995. At first I believed it worked because these equities, due to their limitations of size and liquidity, remained under the radar of institutions and day and high frequency traders. These little stocks dwell in the "shadows" waiting for the individual retail investor. Additionally, the strategy is deceptively straightforward and simple.

@Ludwig: Agreed, you don't need to wait 15 years. Recently, a paradigm changing (for me) paper has been published by Ibbotson,et al http://corporate.morningstar.com/ib/html/pdf.htm?../documents/MethodologyDocuments/ResearchPapers/LiquidityAsAnInvestmentStyle.pdf which gives credence as well as understanding to small cap strategies. Although I cannot use SIPro on my Mac, those who still use Windows PCs can easily set up screens for Shadow Stocks with a liquidity kicker.


Aram Tomasian from MA posted 5 months ago:

from anovice trader dysmall cap fund id better than large cap fund in 2013 . d


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