NOTE: The information on this website is informational --- nothing is being recommended, guaranteed, or suggested. If you have studied the "Brainwashing" book and intend to use the information it contains, the numbers and ideas presented here should be helpful to you --- for analytical purposes only. Any actions you choose to take are your own.
IGVSI Out-Performs S & P & DJIA Averages Since 09/2007 Peaks AND Was The Only One In Positive Territory for the 4.25 Year Period
Both the S & P 500 and DJIA lag the IGVSI and neither has come close to 2007 All Time High levels --- the IGVSI established a new All Time High on April 30th 2011.
The IGVSI is a barometer of a small but elite sector of the stock market called Investment Grade Value Stocks. Some IGVSs are included in all averages and indices, but even the "blue chip" Dow includes several issues that are well below Investment Grade --- very few boast an A + rating. The S & P 500 contains about half the IGVSI selection universe, which tracks a portfolio of less than 400 stocks.
See The Latest Working Capital Model Index Chart & Numbers
The Working Capital Model Indices provide benchmark numbers for use with investment portfolios that are managed using the methodology described in "The Brainwashing of the American Investor: The Book That Wall Street Does Not Want YOU to Read". Steve Selengut, author of "Brainwashing" and developer of the methodology inside, has referred to it for years as: The Market Cycle Investment Management Methodology.
Toward the end of April '11, the IGVSI was 6.9% ABOVE its 2007 all time high while the S & P & Dow remain more than 13% below October 2007 levels.
Comparing Market Cycle Investment Management (MCIM) component Indices with the S & P 500 confirms what you should expect. These quality based measures fall more slowly, don't bend as far, and regain their upward momentum more quickly than the S & P 500 --- they pretty much have to. But it gets better.
LIVE INTERVIEW - Investment Management expert Steve Selengut Discusses MCIM Strategies - LIVE INTERVIEW
Because the MCIM operating system demands buying on weakness (and because all securities produce income), positions are increased and new positions are added while others panic. A true MCIM user would be taking profits during rallies, in preparation for the next inevitable downturn --- it's part of the methodology.
Using MCIM, one would logically expect new all time high market values well before the averages and indices revisit their previous highs --- and portfolio income continues to grow as the cyclical process plays out. Click the link below to view Peak~Trough~Peak dynamics surrounding the most recent "financial crisis" --- NOTE THAT THE IGVSI ACHIEVED AN ALL TIME HIGH on 4/29/2011.
Investment Grade Value Stocks and high quality income securities - mostly CEFs - are the primary securities contained in Market Cycle Investment Management (MCIM) Methodology portfolios. Then, using disciplines that encourage profit-taking during rallies, and selective buying during corrections, it should be clear that market balance performance just has to do better than brainless (passive, if you will) averages and indices.
Assuming that the average MCIM portfolio has an asset allocation of roughly 50% IGVSI equities and 50% MCMSI income closed end funds, it is clear why these portfolios just blow away all forms of passive (lazy) investment strategies --- particularly in volatile market scenarios. The figures really do speak for themselves, with the MCIMI being the combined IGVSI and WCMSI Indices:
- From 9/30/07 to 3/9/09: MCIMI down 41% vs S&P down 56% and DJIA down 53%
- From 9/30/07 to 4/30/11: MCMI up 2% vs S&P down 11% and DJIA down 9%
- From 9/30/07to 12/31/11: MCIM down 1% vs S&P down 18% and DJIA down 13%
And, by the way, both the IGVSI and the MCMSI on their own, seriously outperformed both major averages during the same time periods, with the IGVSI establishing new All Time High levels in April, 2011.
- From 9/30/07 to 3/9/09: IGVSI down 47% and MCMSI down 35%
- From 9/30/07 to 4/30/11: IGVSI up 12% and MCMSI down 8%
- From 9/30/07 to 12/31/11: IGVSI up 1% and MCMSI down 4%
Now sit back and imagine how a Market Cycle Investment Management portfolio would have performed during this time frame (and any other true market cycle you can come up with) --- what if you had bought IGVSI equities and high quality income securities every time the market fell, panicked, or hic-cupped? And then, what if you had the courage to take your profits each and every time they reached a reasonable level on an individual issue basis?
Well that's exactly what happens in a portfolio manged using the principles explained in "The Brainwashing of the American Investor: The Book that Wall Street does not Want YOU to Read". Not to mention the added benefit of a consistent and constanly growing monthly cash flow....
Embrace the Market Cycle Investment Management Methodology; smile about your investment portfolio way more often.
Now doesn't this make a whole lot more sense than the hocus-pocus of "Modern Portfolio" Theory? It may not be as intellectually impressive, but it sure does work better.
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IGVS - Part 2 <--
