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May 4, 2011
Edited: May 4, 2011
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I have done a number of 'price only' market studies. These studies tend to show market tendencies, some which provide a good 'reward/risk' ratio. Some I have implemented. This year one I implemented is buying the Dow index at the close (actually at near the close) when the DOW has a day where the index drops by 100 or more points. I buy using a non-commissioned ETF via my broker. For the purpose of the numbers below however, I will use a Dow ETF index, DDM, which is available to everybody.
So far this year, the DOW has close down over 100 points nine times.
Today could be the tenth. My gain for the year with this method has been better than 12% actual, non-annualized (based on the close of May 3).
I have spend $9000 and have 153.12 shares. The $9000 is now worth 10.208 which provides a 12.8% gain. If the DOW closes down over 100 points today, I will purchase another $1000.00 worth of the ETF. Of course, one needs to have a overall bullish outlook for this strategy to work.
DDM Date purch /share price / Quantity
28 Jan 56.84 17.59324419
23 Feb 60.45 16.54259719
24 Feb 59.8 16.72240803
1 Mar 59.35 16.84919966
10 Mar 58.66 17.04739175
15 Mar 57.37 17.43071292
16 Mar 55.05 18.16530427
12 Apr 61.34 16.30257581
18 Apr 60.7 16.47446458
cost $9000 shares 153.1278984
ddm shr price 66.86
value $10238.
yield 12.09%
