Definitions

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GENERAL  DEFINITIONS

 

money market fund

A money market fund is an investment that is similar to having your money in a bank.  You earn a low amount of interest, but the money is virtually insulated from moves in the stock market.  It is commonly referred to as a "cash" position.

drawdown

In reference to the system, this is the percent an account went down from its high while the system was on a buy signal during a certain period of time.  In reference to a stock market index, it would be the percent the index went down from its high during a certain period of time.  The amount of drawdown can influence an investor's emotions to such a great extent that she/he will sell everything at just the wrong time, just before the stock market turns around and starts going higher.  This is why many so called buy-and-hold investors don't stay buy-and-hold, and why their investment performance results are worse than buy-and-hold.

whipsaw

A whipsaw trade is one that occurs shortly after a previous trade.  In this case, it would be a buy signal given one or two days after a sell signal, or a sell signal given one or two days after a buy signal.

leverage

In this case, it means that the leveraged index mutual fund will move some multiple amount of what the represented index moves.  For example, if an index mutual fund is leveraged 200%, it means that if the index moves 10 points up or down, the leveraged index fund will move approximately 20 points up or down, respectively.  If you are invested in a leveraged fund, your risk of losing more money is increased, but the potential of making more money is also increased.

shorting the stock market

In this case, to short the stock market means to be invested in a stock market index mutual fund that increases in value as that index goes down.  Conversely, if you are short the index fund and the index goes up, you will lose money.

DISCLAIMER

The stock market is inherently risky and at times it is very volatile.  Neither the Stocks-timing system, nor any market timing system can avoid such risks and volatility.

The failure of the Stocks-timing system (or any market timing system) to provide timely and accurate signals to purchase or sell consistently every time in advance of moves in the market may result in significant future losses.

Past performance does not guarantee future performance.  Results that show after the fact how a system would have worked using historical prices do not guarantee future performance either.

The historical pro-forma figures assume an ideal S&P 500 fund that does not charge any transaction fees, trading fees, or management fees and that allows an investor to trade in and out of the fund every day.  A fund with all of these characteristics of an ideal S&P 500 fund is not actually available and the lack of some or all of these features would have affected the pro-forma hypothetical performance and could affect future performance.  Future performance may also be affected by failures to act promptly on future signals.

Use of this or any system for trading or investments of any kind is done solely at the subscriber's risk.  Stocks-timing assumes no responsibility or liability for 1) the information provided, 2) any problems whatever in the transmission of information to any subscriber, 3) the timeliness of the information provided, or 4) any gains or losses in a subscriber's account that result from following or not following the information provided.  This and any other information that is provided by Stocks-timing is done solely for informational purposes only.  This is not a recommendation to buy or sell any particular securities.