Alpha Investment Newsletter

Stay Ahead in 2015 and Beyond...

 

The S&P500 Gained 70% in 2009 on Rebound from 2008 Collapse; Gained Further 20% in 2010, Closed Flat in 2011, Gained 12% in 2012, and Gained 40% in 2013-2014. The Central Banks have supported the Global Economy like never before.

 

Despite Fewer Jobless Claims, the US Economic Recovery is not strong. Many Jobs are Part-time and Wages are stagnant.

 

Emerging Markets are struggling with everything possible - Inflation, Deflation, and Low Growth.

 

Zero percent interest rates are holding up the Global Economy. For how long can it work? Can it help us muddle through?

 

Banks, States and Countries Can Still Fail in 2015-2016 just like in 2008, Taking Everyone Down.

 

Meanwhile, the Global Equity Markets are at their highest levels. NASDAQ hit 5000 in March 2015 – first time after year 2000!

 

Where Are We Headed From Here? When Should You Stay In the Market and When Should You Exit?

 

As An Investor, You Know The Importance Of Timely And Actionable Market Analysis.

 

Stay Ahead with Alpha Investment Newsletter...today in 2015, and beyond.

 

Charts of the S&P500 Index illustrate a roller-coaster ride of peaks and valleys, but in the end, "buy and hold" investors are left pretty much left stuck in the mud when wild market swings take away profits earned over several months. However, if you sell off at higher levels and buy-back back at lower levels, then you can do much better than the Index. We have been gaining from this approach for a long time.

 

Our subscribers are based in North America, Europe, and Asia-Pacific. Our simple weekly newsletter tells what we are going to do in the coming week: buy, hold, or sell. We trade only with 3 Index ETFs.

 

Some Recent Benefits:

 

Trading Index ETFs is profitable when you buy during market falls, exit the market at a high point, and buy back your ETFs at lower prices again. Our newsletter will have the information on when to buy and sell — you just have to use it!

 

Please Note: Our newsletter can also be used for Index Futures trading for good results, but Index Options trading is a very different ball game due to time value, and we don't advise option trading with our newsletter.

 

The global capital markets take cue from the US, and S&P500 and Dow Jones are the indexes to watch from across the world.

 

The goal of Alpha Investment Newsletter is to give you a regular update on the Global stock markets (using key indices) and to keep you aware of the key developments affecting the market and to guide you with specific inputs in terms of buy and sell that we are doing for our own portfolio. 

 

We publish our weekly newsletter by email along with summary of the market and any essential notes or action items that may be needed in case of unexpected/extreme market behavior.

 

Who Can Benefit and Who Can Not?

 

Our newsletter is aimed for investors who want to make profits from investing in stocks/ETFs by trading just about 10 times in the entire year; its not for day-traders or short-term traders or derivative traders.

 

So we won't be giving intraday trading calls or daily trading calls - that is not the goal of this newsletter. It is very difficult to successfully predict such short duration changes in the market. The goal of our newsletter is to identify the broad trends in the market and to use them in such a way that we are reducing the risk of our investment and staying in the investment only when the market conditions are favorable for a positive movement and growth of our investment. 

 

 

Money Saved Is Money Earned...

 

The market forces are powerful and they affect stocks across industries. Even the best companies took a big beating when the market crashed in 2008 and early 2009.  That's a clear example of how irrespective of the quality of the company and the quality of earnings, when the market sentiments are bad, the stock prices will go down along with the market. One stock may fall 30%, while other may fall 50%, but both are large falls and what we want to do is to give you inputs to help you exit the market at times when we believe the situation is not favorable and a correction in prices is overdue. That is a big money-saver in our experience.

 

 

Our investing experience has shown that it’s possible to have run a profitable investment with just about 6-15 trades per year, spending much less time on managing the portfolio. Our profitable portfolio has just 5 components, including cash, and it is very easy to replicate at your end.

 

A common myth in the market is that you have to trade a lot to have high returns - its not true. When you trade a lot you also have very high brokerage costs and you are also likely to miss some of the larger trends in chasing some of the smaller trends. Our experience has been that it is most profitable to work with larger market trends -- seek 10-20% gains rather than 2-3% gains in short term trades -- to stay invested when the trends are positive, as opposed to day-to-day trading, which is what most traders do. 

 

We believe in moving out of out ETFs/stocks into cash when the markets are not looking favorable. In fact the market's technical indicators often give warning signals before the markets start falling, which is when most people start to take notice and that is one of the big benefits of our newsletter where we are able to protect the portfolio from any significant losses like in 2008.

 

Therefore, one of the biggest benefit of following our portfolio updates is that your losses can be limited in the event of major market falls -- we are likely to have a couple of them in 2010 and 2011 -- because the moment we see weakness/bearishness in the market through technical indicators we will move away from ETFs/stocks into cash and you can consider doing the same.

 

After we have exited the ETF, sometimes the market may continue to move further before finally coming down. We prefer to lose some extra gain than to lose investment capital, especially when global investors tend to pull money out with great speeds. Thus, exiting the market while it is still bullish reduces the risk of facing a rapid corrections which can take the market down by 5 to 10 percent within 2 or 3 trading sessions and this has happened several times in the past and it will surely happen in the future too.

 

The markets will never rise too much in a few days but the markets can fall rapidly within a few days. So it’s very important to protect the portfolio and investments from extreme falls and that is something that we ensure that we are using the indicators to cut out of the market at the weak signals and then come back into the market when the weakness is gone. 

 

Sometimes the weakness remains for a few days; sometimes the weakness remains for a few months.  It’s okay as we must maintain cash when we are not in a positive market because cash is the best way to preserve the value of the portfolio.

 

We share planned portfolio updates in our monthly newsletter, with updates every weekend. If there is an important/urgent market development, then we may mail you mid-week. Otherwise, in the course of normal market behavior, we don’t need to do anything except to stay on the course. 

 

We will let you know by email when the market course is changing so that you can take the action that we have already taken so we can stay in sync and take the same actions.

 

So our newsletter will be an informative source for you to see how we are managing our portfolio and it’s up to you to take how much action you want to do.  If you were to copy our actions, you would get the same gains and you would have the same protection to your portfolio.  And in addition to that you can use our market analysis to plan your own portfolio in a bigger or a narrower way as your case may be. 

 

We are long term investors, and do not want to take any intra-day trading. Our portfolio can be managed by looking at the ETFs/portfolio once a week or maybe 2-3 times per week if you want to be active, and in that sense whenever there’s an important message you will get it by email and you can take an action on that and we will let you know in advance that this is a good time to buy or this is a good time to sell and exit to market. That’s how we can benefit. 

 

Please Note: We will not be able to advice on any individual stocks or individual questions because this is a newsletter service. We do our analysis; we publish the newsletter.  You can read the newsletter and use it in whichever ways you think it’s most beneficial for you. For any individual queries on any investments you can speak with a certified financial advisor or certified financial planner.

 

We will be doing the actions on our own portfolio and you can consider doing the same – that’s the fundamental message that we have and we will continue to see newer opportunities in the market so if you find something which is an attractive investment opportunity we will add that into our portfolio and in that sense, through our portfolio, not only you will understand when to enter the market; when to exit the market, you will also learn about newer investment opportunities, some of which you could consider for your own investments as well.

 

 

Our Portfolio

 

We have the following model portfolio:

 

1. US S&P 500 ETF (covers US market) - 40% 

2. India Index ETF (covers high growth market of India) - 30%

3. Hang Seng Index ETF (covers high growth of China & Far East) - 20%

4. Cash (as gold ETF) - 10%

 

The ETF details are shared with subscribers. All are available for investors in the USA and Europe.

 

Thus our newsletter covers three major markets across the world - covering the western world in the US and Americas and the Asian markets.  We have seen major interest in emerging markets from investors in USA and our portfolio has received good response.

 

Following is a sample set of trades from our model portfolio.

From March 2007 to April 2010, our Simple ETF-based portfolio delivered 127% gain compared to 13% loss in S&P 500 ETF over the same time period.

http://alphainvestmentnewsletter.com/images/alphainvestmentnewsletter-portfolio-chart.PNG 

 

 

When we buy the Index ETF (S&P 500 SPDR ETF), we are buying the entire market, which eliminates company specific risks. In my 15 years of market experience, the single biggest risk to investment capital comes from company specific risks, like lawsuits, some corporate governance issue, some plant accident, and the stock loses 20% overnight. Fund managers may say they are good at stock-picking but it’s really difficult to pick winners on a consistent basis. The difficultly with stock picking is that even after you have identified a winner, you can't load all your capital on one stock. So you need at least 4-5 winners to load your capital, and that's really difficult even for good fund managers. Capital moves with great speed between stocks and sectors. No fund manager can match the speed of capital movements. In addition, even top quality stocks can run into trouble. For example, a blue chip like Goldman Sachs fell almost 25% over 2 weeks in April 2010 due to legal issues.

 

The market is very intelligent and it’s difficult to beat the market in long term. Despite the best efforts most actively managed funds are unable to beat the market for durations over a year or two, because the market is a very intelligent creature – it’s the collective brain of all professional investors and fund managers who are trying to out-perform others and they are all operating within the market!

 

Because we use only Index ETFs, you don't need any stock-specific research and you have no stock specific risk.

 

Please note that most recent portfolio updates will not be posted on the website; they are available only to our subscribers. Our portfolio of sample trades will be updated on our website and you can see how they are performing. We hope you will have a profitable investment journey with us and we look forward to having you as a subscriber.

 

 

FAQ

 

Following are the Frequently Asked Questions by our subscribers. You will find most of your answers here, and if you still have a question, please contact us and we will reply promptly.

 

  1. How do you decide when to buy and when to sell? 
    That's an important question because timely buying and selling decisions are the key drivers behind a portfolio's profitability. We use a variety of market indicators for arriving at our decision to stay in the market or leave the market and convert our stocks/ETFs into cash. So our portfolio uses ETFs and stock for "long" and cash for "short". A variety of indicators are used to show us about the moving averages of the market, the overbought/oversold positions, the momentum and the volume of trades, the inflows from domestic/foreign institutions and the outflows from domestic and foreign institutions, and also we are able to see the closing prices and how they are behaving on let’s say a week-to-week basis.
  1. Do you also use Technical Analysis along with Fundamental Analysis?
    Yes. Technical Analysis along with Fundamental Analysis is very important because factors like liquidity and foreign capital flows are not easy to capture with fundamental reasoning alone. We use a variety of technical indicators like Trading Volumes, VIX, Put/Call Ratios, RSI, EMA, etc. And we have learnt that no one indicator is perfect and we must check with multiple indicators to understand the market status and direction. Therefore we use multiple technical indicators and analyse the market over 1 month to 5 year period to see trends. We often go back in time and market history to look for precedents. The capital market evolves with time but it’s also possible to learn a lot from history to see what the current market condition is saying, and then decide what our own investment strategy will be. Sometimes you will expect market to correct from an overvalued position, but if the US government or some other major country makes capital supply cheap, then the market will continue to rise from overvalued to "more-overvalued". And this rise can go on for weeks or months before reality sets in. We have learned from hard experience that it is better to stay with the trend rather than predict a contradictory move and take a contra position. Roger Babson rightly said in the 1920s for such cases: "The irrationality of the market can bankrupt the most rational of investors".
  1. How do you assess macroeconomic factors and use them for the portfolio?
    There are various macroeconomic factors that play a role in market movement and if we know that something is going to come as a major event in coming weeks/months, we know from experience that however much the market may have factored the event, invariably when the event actually happens there will be a sentiment that will move the market sharply. Therefore we have to also plan for those things and if those events are major then those could mean either earning five or ten percent points as gain or losing five or ten percent from the gain that we had. So we try to stay on top of some of the core developments in the global markets. The global capital markets are very tightly connected today. There are people who say that the global markets of different countries are decoupling. On the contrary, we feel that they are actually more and more tightly coupled today than ever before.  Capital flows very efficiently overnight from different markets. For example, capital deployed in the US can move into Asia overnight and work there and move to Europe after Asia and come back by the start of the next trading session in the US! Thus global capital markets are closely linked and news-flow has an impact because just like the global economy, most billion dollar trading houses run parallel trades in different markets, hence the capital flows are truly global and it’s very important to watch the global trends.
  1. How do subscribers benefit from your newsletter?
    We do all the market analysis mentioned above and we maintain a model portfolio with less than 5 constituents, inlcuding cash. we try to do all that as part of our newsletter and summarize everything into a message which is simple in the sense that should we stay in the market or should we go out of the market – that’s the ultimate call that we want to make at any given time.  If we have to stay then we will stay with our ETFs and if we have to go out then we will convert them to cash. That's how we have built our gains in our model porfolio since 2007. Our newsletter will tell you what we are doing with our portfolio and you can make suitable decisions at your end.
  1. What is the composition of your portfolio?
    We use two Exchange Traded Funds or ETFs and we use cash so our portfolio essentially is a mix of just three line items, if you can call them like that.  There are two ETFs and there is cash, and the two ETFs are covering widely different markets, covering the western world in the US and Americas and the Asian markets.  So that is a mix that we will tell you.  You have the choice to go with only one of them, only one of the ETFs and stay with cash as the other item, or if you are with any of the reputed brokers or stock brokers you can easily access both the ETF that we have, and in that sense you can have a really dynamic portfolio as we have seen.  So you do not have to do any extensive stock-specific research.  We have found that just by buying the market, because when we buy these ETFs they are almost like buying the market, that itself gives good return because you have to understand that despite the best efforts most actively managed funds are unable to beat the market in any longer durations of let’s say one year, two year or three year or more.  So the market is a very intelligent creature because it is the collective brain of all the fund managers who are trying to do something better than the others and they are all operating within the market and we believe that the market is extremely intelligent as a collective creature and that it is not an easy task to beat the market on a significantly long duration. 
  1. How does your portfolio's performance compare with the DOW Index? How do you maintain your portfolio performance?
    Our portfolio has done a better than DOW because we have maintained the discipline to sell at higher levels and buy on falls. It has helped us holding a large amount of stock purchased at higher prices. As you will observe from the charts shared in our portfolio, we carefully monitor the ETFs/stocks, and will sell once we feel the ETF/stock is overbought. Overall, it takes constant effort to stay ahead. One can easily beat the market for a day; one can also beat the market for a week or a month, but its not easy to beat the market for over long durations like multiple quarters or multiple years. Our portfolio has been able to do it, while sticking to simple rules of buying and selling, and always keeping some cash, i.e., we don't believe in investing all our cash, at any time. Very few people have been able to beat the Index over long term, and one person who has been able to do it well is Warren Buffett and he is one of the best investors out there, who knows how to assign value to present cash flows and future growth. He is one of the best in the world and if you see his approach for investments, he has chosen long-term investing where he has stuck with the investments for multiple years at a time.  He has not traded with his stocks on daily basis. We operate with a difference. We believe it is fine to buy and sell when the opportunities come, which are about once in a month or sometimes once in a quarter.
  1. How often is the newsletter released?
    The newsletter is released every weekend, based on the market developments.  About once every month, the newsletter will cover broader macroeconomics and capital flows into various assets, and will aim to constantly give investors an idea of risk-reward ratio from current market level. The aim is to share whatever analysis we have at the earliest possible. Weekend closing levels have significance and they enable longer-term trend analysis. Therefore our newsletter comes on the weekend, usually Sunday afternoon so that it can be used from Monday morning.
  1. How is the newsletter shared with subscribers?
    The newsletter comes by email, which is the fastest and most efficient method of communicating our newsletter. We request our subscribers to use an email id that they check regularly.
  1. How many trades do make in your model portfolio per year?
    We have done 6 to 10 trades per year. We use a range of market indicators to enter and exit the market. Overtrading can reduce profits as brokerage costs can eat into gains, and if we enter the market at higher levels, then it often forces an exit soon after the entry because the market may be overbought. Its important to buy and sell at the right levels. Our newsletter will share our portfolio updates, which can help you make decisions at your end.  
  1. Can you advice on a specific stock or query?
    That won't be possible because this is a newsletter service so we can't answer any individual questions on stocks or stock selection because that is not the scope of this service. Our newsletter is a publication and so we will publish the information that is for your consumption and we are going to share what we are doing with our portfolio and you are free to do some of the actions that we are doing, all of the actions we are doing or none of the actions we are doing.  That’s your call as a reader to the newsletter.  We will share what we are doing and we will be measuring the effect of our actions on an ongoing basis.  For individual investment queries please consult a qualified financial advisor in your area or contact us for with your requirement and we will see if we can arrange a consultation for your specific case.

 

Subscribe Today And Start Benefiting from Our Market Insights!

 

You can start benefiting from our newsletter right away, and stay the market when it’s bullish and exit when it’s bearish. Make our market insights work for you.

 

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Please Note: After making the subscription, please send us an email telling us about your location and the markets your investment, so that we can help you better: info @ alphainvestmentnewsletter.com

 

Payments are processed by PayPal and taken by MyOrbit Ltd. The subscription fee is very nominal compared to the benefits you would get. You could recover your subscription fee within 2-3 newsletters, buying and selling the ETFs at suitable times. Our ETF based portfolio completely removes stock specific risk. Remember, even a blue-chip like Goldman Sachs lost 25% value within 2 weeks in May 2010. For long term investors, its best to buy the Index ETFs in India and China, along with US market index ETFs like S&P 500 Index ETF (SPY).

 

Once you subscribe, we will add your email id in our subscription list, and you will start receiving our investment newsletter every weekend. If something is really important, then we may mail mid-week, but it’s rare. We look forward to sharing our market insights and portfolio updates with you, to help you make better investment decisions. We reserve the right to revise the above subscription fee periodically.

 

Satisfaction and Money Back Guarantee

While we can't reduce market risks for you, we can surely remove the subscription risk with our Satisfaction Guarantee.  If you are not fully satisfied with our investment newsletter for any reason, please contact us anytime within 90 days from your subscription date, and we will give you 100% refund. We prefer to have your trust than your money. Wishing all the best with your investments.

Copyright 2015. All Rights Reserved. Contact Email: info @ alphainvestmentnewsletter .com