Our Traffic Light Alert Investment Warnings Service
Published / Last Updated on 30/08/2024
Stock markets rise and fall all the time. They move due to economical, political, taxes, exchange rates, currency, inflation, investor sentiment and a whole range of economic factors as well as unexpected ‘shock’ events.
Nobody can call the market. If we could then we would be billionaires, investing exactly at the right time and disinvesting at the optimum point to start the cycle again. Buy low, sell high, buy low, sell high.
Educated Guesswork
We can only use our knowledge of the economy and economic cycles as well as views of the future of interest rates, inflation and demand for goods and services both in the UK and globally as well as market history when in a similar cycle to judge whether to invest or not. The only thing we cannot forecast is shock events either economic ones or geo-political such as Ukraine, Gaza, North Korea, and China/Taiwan.
Our Weekly Traffic Light Alerts Service
As part of our ongoing effort to keep clients and websites users up to date, we issue a weekly email update with news and videos. In addition, we issue a weekly Traffic Light Alert email (and published online). In simple terms the Alert includes:
- Weekly Commentary: Includes news and commentary on what happened in major markets that we track across the globe during the week and what we expect over the coming weeks or months.
- Market Sentiment: Positive, Negative or Neutral sentiment over the short term (1 year) medium term (5 years) and long term (10 years) for markets that we track, nit just from us but also from leading fund management groups.
- Traffic Lights: Red (we are not invested/disinvested), Amber (we are holding) and Green (we are investing new money or switching existing funds or cash holdings into these sectors). For example: “Economic data will be key as well as any shock events during this geo-politically tense period with Russia/Ukraine, China/Taiwan, Gaza and North Korea. We also expect a correction of some sort and we are personally still holding ‘opportunity’ cash just in case there is another mini correction as there was three weeks ago and continue to hold in the West, drip feed into the Far East and Europe given France and most of the Far East are still around 10% off their year highs.”
- Example: Are We Investing Today?
- UK – AMBER
- Europe - AMBER
- North America - AMBER
- Japan - AMBER
- Far East/Asia (excl.Japan) - GREEN
- Emerging Markets (Brazil, India, China et al) - GREEN
- Index Linked (Gilts/Bonds) - GREEN
- Fixed Interest (Gilts/Bonds/Corporate Bonds) - GREEN
- Commercial Property - AMBER
- Money Markets/Cash - RED
Traffic Light Alerts Are NOT Advice to You
They are our market sentiment only and what we are doing with our own, personal investments.
You Cannot Time the Market
It is an impossible task to time the market. We suggest you look at trends and where a particular market is compared to its year high, year low and all-time highs. If the sector is 20%+ over its year low and at or near a year high, then it may time to lock out gains or move to a sector that is closer to its year low or way off its year high. Look for trends and hold your nerve.
| Nov-84 | May-98 | Dec-99 | Mar-03 | Jul-07 | Mar-09 | Apr-15 | Jan-20 | Mar-20 | Aug-24 | |
| Nov-84 | 1158* | 419% | 498% | 211% | 480% | 224% | 512% | 558% | 363% | 621% |
| May-98 | 6010* | 15% | -40% | 12% | -38% | 18% | 27% | -11% | 39% | |
| Dec-99 | 6930* | -48% | -3% | -46% | 2% | 10% | -23% | 21% | ||
| Mar-03 | 3601* | 87% | 4% | 97% | 112% | 49% | 132% | |||
| Jul-07 | 6716* | -44% | 6% | 13% | -20% | 24% | ||||
| Mar-09 | 3753* | 89% | 103% | 43% | 123% | |||||
| Apr-15 | 7089* | 8% | -24% | 18% | ||||||
| Jan-20 | 7622* | -30% | 10% | |||||||
| Mar-20 | 5366* | 56% | ||||||||
| Aug-24 | 8351* |
Key:
- FTSE 100 level * during that Month/Year and subsequent return over the years.
- Pink = Invest when markets are higher may mean some periods of losses early on but profit eventually.
- Green = Invest when markets are low and you will likely experience investment profits year on year.
As can be seen from the spreadsheet in this video and the table above, if you invest when markets are lower, you are more likely to make profit consistently over the years rather than investing in a sector when it is higher. If you invest when markets are high, you may still make profit over the years but you are also more likely to have more frequent periods when you are in a loss making position for a number of years.
Traffic Light Investment Alerts are available to
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