Giant snake swallows a camel

The signature of S&P 500 stock index, represented by the blue line on the chart bellow, looks like a giant snake swallowing a camel. The other two red and green lines located toward the bottom of this chart, that resemble "a couple of dead warms squashed on the driveway after rainy day," represent the performance of "Fidelity flagships", Magellan (FMAGX) and Fidelity Small Cap Independence (FDSCX). This chart gives you a glimpse of the realistic results of investing in actively managed funds. The failure of the "Fidelity fleet" to deliver is not an exception to the results of other actively managed funds, such as those managed by T. Rowe Price, Vanguard, Dodge & Cox.  If you research this you will discover their "long-term management of your savings" has brought similar performance results to those represented by the Fidelity results depicted in this chart.

Let’s conduct an unconventional ‘analysis’ of "the giant snake that swallowed a camel" profile – according to biological science, once a snake swallows a large prey it is very unlikely for such a creature to hunt soon as it needs time to digest, but security analysts would argue that biology has nothing to do with finance fundamentals.  They would insist on "stock market unpredictability" and suggest that if the snake wasn't ready, perhaps it would be an opportunity for the "skinny worms" to catch a giant prey.  University professors would confirm this theory and advise a "hold and buy more for long-term," especially when the prices are low. 

Jeremy Seigel, in his book titled, "Stocks for the Long Run" calculated that a dollar invested in stocks in 1802 would have grown to $11 million by the end of 2005 due to "the magic of compounding," so be patient!

With your long-term savings devastatingly shrunken by the end of 2008 and at least a decade of prior "compound earnings" completely wiped out, do you still believe in "hold and buy more for the long-term" strategy?  Do you still keep on "holding" because at any moment the market can jump up again according to its random, "unpredictable" nature?  "Come on," gamble for once and make a guess – how long do you think it would take for this rapidly falling line to reverse direction or at least become horizontal?  Is it tomorrow, next month, or by the end of 2009, as the current government administration is trying to convince?

Buy and hold would've probably work for you...if you can wait a hundred years for a profit!  If you can't then choose a better strategy.  Click on the highlighted link and compare the 'buy-and-hold' performance of some of the largest mutual funds AGTHX VWELX FEQIX PVOYX VPMCX FBGRX JAVLX with the performance of Reverse Signals trading on the same funds. With an average of 2.5 trades per fund per calendar year, Reverse Signals trading system outperforms selected mutual funds by 30% as of the end of February, 2009. 

Review the performance comparison by viewing the statistic tabs at www.ReverseSignals.com for thousands of Wall Street traded stocks and mutual funds. Reverse Signals trading system allows you to customize and select more or less aggressive trading styles and different investment periods based on your comfort level of risk. Default trading periods depict 3 years for mutual funds and 1 year for stocks, and the default trading style is 'Moderate'.

Recession Countdown

By the end of 2007, articles appearing in several European and Asian publications spoke of dark thoughts regarding how badly the US recession would affect their economies.  At this same times, in the US it was "great business as usual" and the word "recession" was nowhere to be found throughout the US media.  

Despite the signs of serious troubles in the real estate and financial markets, leading US bankers continued to reward themselves with generous bonuses for "performance." 

Government economists were well aware of the "talk of a US recession" in the international media and frequently flew across the oceans to speak optimistically about the state of the US economy at international economic gatherings in an attempt to quiet down their worried international counterparts.

By the spring of 2008, a few articles began to pop up in the US media, expressing serious concerns, but an army of financial professionals and economists publicly eradicated any pessimistic thoughts about the stock market and quickly overshadowed these few, small voices. But the word was out.  To prevent a US panic that most likely would've caused a rapid pull of money from the stock market,  the US government administration allowed the national media to brand the US state of internal affairs as "experiencing a mild depression."  This was inevitable as the truth about the state of the US economy continued to expand its' reach to more and more of its citizens and international neighbors.  The media had also continued to give advice about what was needed in order to reverse this mild depression and chanted "BUY, BUY, BUY, SPEND, SPEND, SPEND," and television and radio financial advisors, as well as Wall Street pratitioners continued their grand discussions about how hot the market was and what great bargain companies were available to buy.

By late summer of 2008 the market started falling so rapidly that even the mad money man was caught by surprise.  At least he was honest and one of the few in the media to scream, "The king is naked!” and openly advised his viewers to get and keep their money out of the stock market.

The government administration in power bluntly kept the word ‘recession’ out of the national media dictionary until the final month of their term, December 2008.