Using Technical Performance Measures by Sidney I. Gravitz Today's spreadsheets offer investors the ability to develop customized economic and investment monitors. Here's one take on the use of a spreadsheet for managing money. I f you invest, you may find that success comes about from committing funds in accord with favorable odds. I use widely available technical performance measurements (TPMS) to track the various phases of the economic and market cycles, along with moving averages to aid in specific buy and sell decisions. My approach is suitable for investment amateurs with a personal computer spreadsheet, an analytical bent, a moderate tolerance for risk but only limited time to devote to investment management. Stock and bond investing is attractive because it is a positive-sum game. Gambling is typically a negative-sum game — that is, keep at it long enough and the house will win. Commodity speculation, in contrast, is (almost) a zero-sum game — for every loser there is a winner plus transaction costs. On the other hand, the US economy's historical expansion has resulted in a median 10-year annual return since 1926 of 9.7 % in the Standard & Poor's 500 index. I believe that some intelligent tracking, screening and assessment can improve on that amount, with relatively modest risk. In particular, intermediate-term investing — one to three years — using basic economic and market cycle timing considerations can exceed average market returns. |
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