The Amazing 1 and 2 Year Returns on DOW
Stocks
The Results are in.
Stocksystem.com conducted historical
simulation testing on the Dow 30 stocks over the last 1 and 2 years and
compared them to the results of an identical "Buy and Hold"
portfolio.
The Study shows that if two investors purchased
500 shares of every DOW 30 stock 1 year ago the PCA System user would
have garnered more than 400% more profit than the investor who
purchased the exact same stock, and held for the same amount of time.
The basic idea behind the PCA
methodology is that market risk is mitigated by using a cash reserve to
manage the holdings on a long term basis. The real benefit here is
that the risk exposure is actually lower.
It is fairly difficult to compare
a "system" like PCA to buy and hold because the PCA had the
additional buying power of the cash reserve on it's side.
Stocksystem has taken that into
consideration, the study also includes returns based on an "equal
dollar amounts" invested basis.
|
ONE YEAR
DAILY RETURNS
|
|
PCA
Return
|
Buy/Hold
Return
|
B/H
Same $$
Invested Return
|
|
$48,545
|
$11,617
|
$23,234
|
As shown above, the "Same
$amt." return for the buy and holder doubled and PCA stayed the
same. In this case the PCA still outperforms buy and hold, but really is
considered superior because the PCA system only had limited amounts
of money at risk throughout the test period, and the buy and holder
was 100% at risk the entire time.
While that may seem like a great
improvement over buy and hold, the 2 year results were even more
astounding. The PCA System over a two year period garnered a profit
of $63,216 while the buy and holder managed a dismal
($39,733)
As if that was not bad enough, had
the buy and holder used the equal dollar amount comparison, he lost
($79,466) for
a net difference of $142,682.00
|
2 YEAR
RETURNS USING WEEKLY CLOSING PRICES
|
|
PCA
Return
|
Buy/Hold
Return
|
B/H
Same $$
Invested Return
|
|
$63,216
|
($39,733)
|
($79,466)
|
Complete Return Data
for Each Stock for 1 Year Daily Test. In
this 1 year daily study the PCA system generated more than 4 times the
profit of the buy and holder on the same number of shares, and if they
invested the same dollar amount the PCA system generated more than 2 times
the profit of the buy and holder.
Complete Return Data
for Each Stock for 2 Year Daily Test. In
this 2 year weekly study the PCA system generated a $63,216
profit. The buy and holder on the same
number of shares is down ($39,733),
and if they invested the same dollar amount, the buy and holder lost ($79,466).
For a net difference
of $142,682.00
The PCA software will not tell you which stocks
are going up tomorrow or what to expect from the indices next week, but
it will take your own carefully selected stocks and manage them in
the most rational and common-sense manner.
PCA wants you to select a good stock and stick
with it. Trade it through the ups and downs and let the stock work for
you. Time and compounding will be on your side. After all, Investing is
about making money work for you.
"These
examples demonstrate the power of disciplined, systematic investing. The
PCA system achieves superior returns while taking on less risk with any
stocks, not just the Dow. Our thousands of users around the globe can
attest to the benefit of being contrarian investors."
Bill McKinley
President, Stocksystem.com Inc.
Imagine the comfort you can have with PCA
guiding your trading decisions...
The
PCA System for Windows
on CD ROM.
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The complete details of how the
study was conducted are as follows:
The Simulations were run in the PCA
for Windows v2.4.19
The study assumes, in all
simulations, that all trades recommended by the PCA software were executed
at the closing prices daily on the one year simulations, and at the weekly
closing prices for the two year simulations.
The study does not take into account
the interest earned on the money not at risk in the PCA simulations, nor
does it include calculations for taxes, commissions,or any other trading
related expenses or interest.
The calculations are based on the
trading advice generated by the software on default settings. NO
optimization took place during the testing.
The Dow 30 was selected based on the
conservative nature of the stocks in the index.
For additional information about the
limitations of simulation testing, please see our disclaimer.
