THEY WILL DISAPPEAR

Michael Harris
3 min readMay 24, 2024

THEY ALWAYS DO

Photo by AlphaTraderZone

Do you know what the permabulls with those social media accounts and podcasts who constantly edit, refresh, and publish the same articles about the advantages of buying and holding, or even dollar-cost averaging, will do when the next bear market arrives? They will disappear for a while!

This is what they always do, and when they are convinced they have found a bottom, they reappear, bragging about their long-term record and the benefits of averaging down while pointing to some graphs. The audience will mostly consist of “new investors,” because most of the older ones had already exited when the panic hit.

Carton by Stefan Gasic

Most investors exit the market after a bubble bursts with significant losses. Only those with limited market experience think they can identify tops and bottoms. What we can do is use strategies and indicators that have the potential to limit losses.

Photo by Monica Silvestre
Photo by Monica Silvestre

"The market is a large theater with a small exit" N. N. Taleb, Skin in the Game

Market timing has the potential to reduce losses due to a market top. With that in mind, we have developed a dual approach to market timing: hybrid asset allocation.

Hybrid asset allocation (HAA) employs two strategies: asset cross-sectional momentum and strategic allocation. Both strategies use ETFs to generate signals in the monthly timeframe.

On top of that, we have also developed a dynamic momentum strategy (DYNMOM). This is a proprietary timing algorithm that trades the SPY ETF. Its objective is to maximize the Sharpe ratio and avoid market corrections.

With a monthly subscription, both HAA and DYNMOM signals are available. After the last trading day of each month, subscribers receive an email notification and can log in and view the updates, including whether there are new entry or exit signals.

We provide precise entry and exit signals every month. Click here for more details.

Disclaimer: Investing in any market, including exchange-traded products (ETPs, ETFs, and ETNs), could result in a total loss of capital. The hybrid asset allocation and dynamic momentum signals (signals) are provided for informational purposes only and do not constitute investment advice. We do not warrant the accuracy, completeness, fitness, or timeliness of the signals for any particular purpose. Under no circumstances should the signals be treated as financial advice. At times, we may hold positions, long or short, calls or puts, in several exchange-traded products listed in these reports. The author of the website is not a registered financial adviser. Before subscribing, read our Disclaimer and Terms and Conditions.

CFTC RULE 4.41 Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated performance results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Hypothetical trading results are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

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Michael Harris

Ex-fixed income and ex-hedge fund quant, blogger, book author, and developer of DLPAL machine learning software. No investment advice. priceactionlab.com/Blog/