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The Psychology of Momentum and Trends• Momentum and trend investing work because of a basic human trait.
People imitate successful behavior. When they hear of others making money in the market, they buy in.
• Eventually the trend reverses. It may be merely the normal expansions and contractions of the business cycle. Sometimes the cause is more dramatic — an asset bubble, a major war, a pandemic, or an unexpected financial shock.
• When the trend reverses, successful investors sell early. The imitation of success gradually turns the previous buying momentum into selling momentum.
• You will never catch the top or bottom however you can board the train without getting crushed.
• Advance and Protect– We specialize in adding and removing risk when it is appropriate – The objective with any money management strategy should be to
reduce risk and maximize returns — with risk reduction being the most important factor.
• Total Return Capitalizes on Change– Invest with, and not against, the market – Advancing and declining markets can work in your favor.
– Emerging Markets– China, India, Australia, Brazil, Canada– Energy
• Oil– Commodities– US equities (less in Europe and Japan)– Shorter term Municipals Bonds– Shorter Duration Corp and High Yield Bonds
• Rally may last several weeks to several months• Issues
– Rising Interest rates– Deflation; inflation in the future– Dollar falling (Euro? stronger)– Market run up should continue into the 4th quarter– Another major correction possible in 2010
• The opinions expressed are those of the advisor and there can be no guarantees as to how markets, investments or products will perform.
• This presentation is for educational purposes only, and not an offer to buy or sell securities. The information should not be viewed or relied upon as advice with respect to asset allocation or any particular investment
• The views of Mr. Hiles are his own and do not necessarily represent the views of CBIZ or CBIZ Financial Solutions, LLC.
• Performance quoted is past performance and cannot guarantee comparable future results; current performance may be lower or higher.
• Diversification does not assure profit or eliminate the risk of loss.• The information herein has been obtained from sources which we believe to be reliable and
accurate, but we do not guarantee its accuracy or completeness. • Consult your tax and legal advisors• Read the prospectus prior to investing.