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Moving Averages: A Month's-End Preview

By  |  Stock Markets  |  Jan 31, 2013 07:16PM GMT  |   Add a Comment
 
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Here is a preview of the monthly moving averages I track on the last business day of the month. All three S&P 500 strategies are now signaling "invested" -- unchanged from last month. One of the Ivy Portfolio ETFs, IEF (iShares Barclays 7-10 Year Treasury), is signaling "cash".

Positions that are less than 2% from a signal are highlighted in yellow. In this month's preview, only IEF carries the yellow alert.

S&P 500
S&P 500

Note: My inclusion of the S&P 500 index updates is intended to illustrate a popular moving moving-average timing strategy. The index signals also give a general sense of how US equities are behaving. However, for followers of a moving average strategy, the general practice is to make buy/sell decisions on the signals for each specific investment, not based on a broad index. Even if you're investing in a fund that tracks the S&P 500 (e.g., Vanguard's VFINX or the SPY ETF) the moving average signals for the funds will occasionally differ from the underlying index because of dividend reinvestment, which is not factored into the index closes.

The Ivy Portfolio
The second of the three adjacent tables previews the 10-month SMA timing signals for the five asset classes highlighted in The Ivy Portfolio.
The Ivy Portfolio
The Ivy Portfolio

I've also included (third table) the 12-month SMA timing signals for the Ivy ETFs in response to the many requests I've received to include this slightly longer timeframe.
Ivy: 12-Month SMA
Ivy: 12-Month SMA

After the end-of-month market close, I'll update the monthly moving average feature with charts to illustrate.

The bottom line, as I've pointed out earlier, is that these moving-average signals have a good track record for long-term gains while avoiding major losses. They're not fool-proof, but they essentially dodged the 2007-2009 bear and captured significant gains since the initial buy signals after the March 2009 low.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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