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Discover The Amazing Power
Of Point & Figure Charting
Performance tests on the Market Dynamics buy list
Market Dynamics Performance Test Updates
Full Year
2010
The performance test for the Market Dynamics
buy list that was sent to subscribers on December 31, 2009 showed a positive
spread of 18.73% versus the S&P 500. This was the best annual relative
performance by the Market Dynamics buy list since 2001. The gross return
generated by the buy list was 31.51% based on a buy and hold calculation. The
performance results calculated for this buy list were extremely skewed toward
positive returns. The buy list
is usually made up of one hundred stocks.
I have periodically tested the performance of
the buylists data that is supplied to Market Dynamics users. This is to verify
that the P&F relative strength charting system is still producing satisfactory
results. I conducted performance tests for data from the years 2000 and 2001 and
similar results were obtained. The large declines recorded during calendar 2008
indicated that the Market Dynamics system continued to outperform the market but
a ”buy and hold” investment system still produced large negative returns.
The performance results of these buy lists are tested on a regular basis and
communicated to subscribers. The positive spread between the buy list and the
S&P 500 is usually within the range of +4 to +15 percentage points. It seems
that results such as these could hardly be the result of chance. It seems
reasonable to conclude that the process used to select these stocks is highly
effective in the identification of future stock market winners. This represents
several consecutive years of excess returns for the Market Dynamics buy list
with only one year that did not produce positive relative returns.
This study represents a hypothetical test, but the buy
list was actually delivered to subscribers at the end of December 2009 and could
have actually been purchased at that time. Commissions and dividends were not
included and this test does not represent real transactions. These performance
tests were based on buying equal amounts of each stock on the buylist of stocks
and holding it throughout the subsequent year. Past performance does not
guarantee future results. The detailed data to support this study is available
upon request from
clayallen@msn.com.
Summary of
Returns
Market Dynamics buy
list S&P 500 Excess Returns
2003
+38.8% +26.4% +12.4%
2004 +17.6%
+9.0% +8.6%
2005
+9.9% +2.9% +7.0%
2006
+15.9% +13.6% +2.3%
2007
+8.0% +3.5% +4.5%
20007-04-11 to 2008-04-08
+2.75% -5.10% +7.85%
2008 (results approximate)
-35.0% -39.0% +4.0%
2008-10-17 to 2009-10-16
+21.0% +15.6% +5.4%
2009 +22.5%
+23.5% -1.0%
2010
+31.5% +12.8% +18.7%
Best Regards
W Clay Allen CFA
January 8, 2011
A free trial subscription for three months is
available – send an e-mail to
mailto:clayallen@msn.com
with “request free trial” in the subject line and please include your mailing
address. Please visit my web site at
www.clayallen.com
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