Author Topic: ASX IJH  (Read 5793 times)

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Offline Tony O'Brien

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ASX IJH
« on: 14/10/2017, 10:15:33 PM »
I am using the single index ETF strategy using IJH.  I have just re joined SWS after a 2 year break from investing. 

2 questions:-

(1)

Does anyone else find that Beyond Charts signals for IJH are different to the SWS App?

According to the App a buy signal on IJH was in September 2017.

Beyond charts shows a buy signal in May 2016.

Am I missing something?


(2) 

The phone App seems pretty good and very easy to use.  Simple simple simple which I like. 

Do other users just rely on the app for buy and sell signals on the ETF's? Do you even need to use Beyond Charts?

Particularly given I am doing the single index strategy, just seems so easy to just check the app once a week for a signal.  Is there any reason to even login to Beyond Charts with the phone app?

thanks

Tony




Offline Sharkie

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Re: ASX IJH
« Reply #1 on: 14/10/2017, 11:18:37 PM »
(1) For me, IJH shows a buy signal in both the app and Beyond Charts on 13 Sep 2017 and there is no buy signal in Beyond Charts in May 2016.

(2) I used to rely on just the app but somehow I missed a signal I should have acted on and so I have recently started to look at Beyond Charts as well.  I'm using an equal weighted strategy on US stocks, though, and really looking forward to when Gary implements more US stocks.


Offline Tony O'Brien

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Re: ASX IJH
« Reply #2 on: 15/10/2017, 11:55:02 PM »
thanks Sharkie.

I just needed to update Data Downloader.  Now getting up to date buy signal for IJH. 

The app seems accurate - I would prefer to just that as I am only checking one stock.  SWS have done well with the app - it is easy to use. 

Steering clear of US market for now.  If SWS system can outperform the IJH returns via a buy and hold by a bit - I am fine with that.

Offline Dave McCulloch

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Re: ASX IJH
« Reply #3 on: 16/10/2017, 11:04:41 AM »
The signals on the APP are exactly the same as those in Beyond Charts providing the data down loader has updated your data in Beyond Charts.

The APP does make the whole process very easy and we've had some great feedback from the Share Wealth Systems community.

The APP should  release a "ping" each night providing push notifications were allowed when the app was installed. Having said that, there is the human element that means it is still possible to miss a signal from the APP or even with in Beyond Charts.

To reduce the chance of this, we'd recommend using a process document to help keep things front of mind.

Gary is currently researching additional stocks for the US and is hopeful of having these available early next year around February.
« Last Edit: 16/10/2017, 04:05:38 PM by Gary Stone »

Offline Tony O'Brien

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Re: ASX IJH
« Reply #4 on: 16/10/2017, 01:36:20 PM »
Thanks Dave.

Just a comment - how much easier is the ETF strategy, as opposed to the SPA3 stock selection?

SPA3 might give you better results in the long term, but in terms of the time spent managing a portfolio, the ETF strategy just seems so much easier. 

I am doing the single index ETF (IJH) and I will literally spend 5 minutes per week managing the portfolio, and sleep easy at night knowing I have some protection against a huge downturn in the market / bear market - where the SWS system will put me back into the safety of cash.

Interesting question for SWS team.  We are approaching the 30 year anniversary of the 1987 stock market crash.

Would the SPA3 ETF strategy protected you from the 1987 stock market crash?  Or was that too quick and too sudden for the SWS software to have put you into cash?  Back testing probably not possible.  But Gary prides himself on saying the SWS system guards you against downside market risk.  What about a stock market crash like 1987?  Would the system protect us by having us in cash some time before such crash?


Offline Gary Stone

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Re: ASX IJH
« Reply #5 on: 16/10/2017, 03:54:25 PM »
Tony,

Quote
Interesting question for SWS team.  We are approaching the 30 year anniversary of the 1987 stock market crash.

I'll be covering this during this week's eUGM on Thursday afternoon. Have some interesting big picture perspective material to cover...

Correction: I'll be covering this in the following eUGM on Thurs 2 November.

Quote
Would the SPA3 ETF strategy protected you from the 1987 stock market crash?  Or was that too quick and too sudden for the SWS software to have put you into cash?  Back testing probably not possible.  But Gary prides himself on saying the SWS system guards you against downside market risk.  What about a stock market crash like 1987?  Would the system protect us by having us in cash some time before such crash?

Will also cover this in this Thursday's eUGM for the ASX All Ords. Signals are not shown in Beyond Charts so will show research charts.

Exit signals can be seen for $DJI, $SPX, $NDX, and $COMP in Beyond Charts if you display all data.

Regards,
Gary
« Last Edit: 16/10/2017, 04:23:15 PM by Gary Stone »
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Offline Tony O'Brien

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Re: ASX IJH
« Reply #6 on: 17/10/2017, 01:18:31 PM »
Thanks Gary.

I have signed up the EUGM Thursday (my first one as a newbie).

I am at work so hopefully I can dial in via mobile.

At face value SWS appears to be the holy grail of investing - beat the market AND protection on the downside.  Buy and hold is what the experts recommends but where is the downside protection?

Looking forward to the discussion on the 1987 crash. 

Offline Gary Stone

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Re: ASX IJH
« Reply #7 on: 17/10/2017, 05:38:49 PM »
Tony,

We do record these and they are published before CoB on the day. So you can watch at your leisure out of hours.

Holy Grail!  :)

SPA3ETF becomes the holy grail when the market tanks really badly and we are all in cash. The feeling is just as wonderful as riding it on the way up.

However, the cost is a little bit of whipsawing every now and then when the market tracks sideways looking like it may fall in heap but doesn't. With SPA3ETF this may be 2 - 5 whipsaw trades over many months.

This is more than made up for when decent up trends hold sway and when in cash for the big bears.

And remember one of the golden dead certs in the markets (of which there are not many):
"EVERY big bear market starts out with a small fall, but every small fall does NOT turn into a big bear market."

We don't want to get into any habit of second guessing which one will or won't become a big bear because for every one that we second guess correctly (i.e. a big bear doesn't materialise), we build misplaced confidence and will be setting ourselves up for not getting out when we should have.

And you only have to make such a mistake once in a lifetime to decimate a portfolio.

Regards
Gary
« Last Edit: 18/10/2017, 08:49:21 AM by Gary Stone »
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Offline Tony O'Brien

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Re: ASX IJH
« Reply #8 on: 17/10/2017, 10:18:19 PM »
Thank you for the reply Gary.

Just ask people who suffered huge drops in their porftolio during the global financial crisis if they would have minded a bit of whipsawing if it would have protected their capital.  If you were 60 and the GFC decimated your portfolio - you would still be paying for it 10 years later.  I'm sure those retirees would have happily paid SWS $1000 per year to protect their hard earned wealth. 

I am not sure why so many people try their hand at "stock picking".  My relative has picked 20 mining stocks for his SMSF, that have never made a profit, are not businesses and I'm sure he couldn't tell you the first thing about any of the companies.  His portfolio of $400k is down 50%.  50%!!!!!!  Even putting the money in the bank would have done better than that.  I mean there is no other field where people, without any expertise, are prepared to try their hand at something which is most definitely the domain of experts.  You wouldn't try your hand at open heart surgery (expert field), flying a jumbo jet (expert field), but picking stocks that will beat the market?  Many people seem to think they can do it.  Staggering really.  No wonder Buffett says to the general public don't bother - stick your cash in an index fund and reinvest the dividends.  He is a financial genius and he realises how hard it is to beat the market.

I am only 35 and have many years of investing ahead.  I watched the HBO Warren Buffett doco where Einstein apparently said compounding was the 8th wonder of the world.  I notice that Gary refers to Buffett's financial performance in his reference manuals.  No doubt Buffett a genius.  Completely self made and appears to have some values.  But who has the time or skill to pore over financial reports etc day in day out (which Buffett does).  Full time job and even then you would be doing well to beat the S&P 500.  If most fund managers can't beat the S&P, what hope have I got?   The diversification of an ETF with a bit of timing via SWS is the limit of my circle of competence.  Hopefully, time and compounding will do the rest.


Offline Tony O'Brien

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Modified relative strength strategy
« Reply #9 on: 18/10/2017, 08:24:58 AM »
Another quick qn for SWS team.

I was looking at simple index strategy with one ETF - IJH.

Then I noticed all the work SWS have done with relative strength. 

Is it an acceptable strategy to buy an ETF on the SWS ASX list (not a stock - just buying one and therefore want diversification) with the HIGHEST relative strength AND then simply wait for a sell signal (ie do not check the relative strengths each week and do not sell the ETF until a sell signal is received).

When a sell signal is received on that ETF, you sell and then look to purchase the HIGHEST ranking ETF (not stock as per above) and then wait for a sell signal.

A bit of a modification to the single index strategy which I was looking at.  Thought the idea of using that wonderful work SWS has done on relative strength could be used to my advantage - but in a single index ETF context.

As a time poor investor I don't think I want to be in and out of ETFs on a weekly basis.  Although I think SWS are onto something with their relative strength rankings.

Thoughts?    Am I crazy?  Should I just stick to trading IJH as a single index or can I incorporate a little tiny bit of relative strength in my low maintainence strategy also?

Offline Dave McCulloch

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Re: ASX IJH
« Reply #10 on: 18/10/2017, 09:42:58 AM »
Hi Tony,

Yes, the Warren Buffet documentaries are great and highlight the benefits of reducing fees and getting compounding working for you over time.

It's wonderfully simple and   only improves when you add a timing mechanism.

Your strategy of using a single index ETF with timing will do just that and it sounds as though you're very comfortable with that which is great because it then becomes an easy to do habit.

As far as tinkering with the strategy and using RS to choose your entry, and then just waiting for an exit signal as opposed to swapping as per the RS strategy is something that could work, although we haven't researched that exact method.

Another option could be to look for ETF's (or stock's) that are existing open positions and have pulled back close to their trailing stop loss line.

Entering a position at this level would present a smaller risk, given their close proximity to the ATR stop loss line, than entering on the original signal. From there you'd just wait for the exit.

An example of this can be seen on the chart of RIO back on June 22nd, and also prior to that on September 2016.

In both examples the method of entering on a pull back worked very nicely.

How much of a pullback might be required?

To be objective, you'd want to establish a simple rule that you could apply in any situation. For example, the price must be within 2% of the ATR trailing stop line.

Other examples can be seen in the charts of WES and WOW in September this year.

On these occasions, small losses resulted as exits were signaled shortly after positions would have been entered.

A number of customers use this technique and whilst it hasn't been researched, it does provide opportunities to take new positions in the absence of any new signals.

If you're thinking about adding a more active strategy to your portfolio it might be worthwhile using a core-satellite approach where you have the majority of your capital in the core portfolio which is typically less active. eg Single index with timing.

The satellite portfolio could then be allocated a small amount of capital and employ a more active strategy, such as equal weighting or Relative Strength or variations of those.

In this way, you're testing your own ability to be able to execute that type of strategy.

If you find that you're comfortable with that approach you can then add more capital to the satellite as your skills and confidence grow.

So, to answer your question...no, you're not crazy at all, but it is important to operate from within your own comfort level and that will be different for every person.
I hope that helps.

« Last Edit: 18/10/2017, 02:35:08 PM by Dave McCulloch »

Offline Tony O'Brien

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Re: ASX IJH
« Reply #11 on: 18/10/2017, 12:46:44 PM »
Thank you Dave.  This is very helpful. 


Offline Tony O'Brien

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Re: ASX IJH
« Reply #12 on: 18/10/2017, 03:12:45 PM »
That amendment is also appreciated Dave.

Just to clarify - if a BUY signal was received a month ago and is still open - then it is ok to transfer into that ETF?

ie - the buy signal remains open until a sell signal is received.

Ie - if I was going to buy into the highest ranking ETF today - that would be ASX IVV as per the SWS app?  Even though the buy signal was in September for IVV, the buy signal remains valid today until a sell signal is received?

Hope this makes sense.

Tony