EdgeTech's proprietary computer algorithms provide detailed buy-and-sell recommendations. All trade recommendations
for both buy and sell, are completely quantified.
The EdgeTech Difference
The Other Side of the "Buy & Hold" Strategy*
By using an Active Management Strategy instead of a Buy and Hold Strategy, EdgeTech's technology monitors price trends
to identify asset classes that are showing strength and then makes investment recommendations in these asset classes
even if the recommendation is cash.
Having a disciplined systematic method of buying and selling can help capture profits while potentially mitigating losses that
are experienced by holding a position that continues to decline. Taking a small loss
on a trade within 90 to 140 days, then moving to another more defensive or potentially more productive category/sector,
is often better than waiting for a current position to recover or return to its original value.
Unlike other investment theories, the EdgeTech model seeks to make decisions based on what is working, not on what
might be working, or has worked in the past.
Black Swans (random and unexpected deviations) sometimes occur among daily returns. For example, a $100 passive
investment in the Dow Jones Industrial Average at the beginning of 1900 grows to $25,746 by the end of 20061, but:
Missing the 10 Best Trading Days...
Reduces terminal wealth (i.e., what an investment is worth at the end of its planned holding period) by 65% to $9,800.2
- Missing the 20 best days reduces terminal wealth by 83% to $4,313.3
- Missing the 100 best days reduces terminal wealth by 99.7% to just $83.4
Avoiding the Worst 10 Days...
Boosts terminal wealth by 206% to $78.781.5
- Avoiding the 20 worst trading days boosts terminal wealth by 532% to $162,588.6
- Avoiding the 100 worst trading days boost terminal wealth by 43,397% to $11,198,734.7
Across all 15 markets and over many decades...
- Missing the 10, 20 and 100 best days reduced buy-and-hold terminal wealth by 51%, 71% and 98%, respectively.
- Avoiding the 10, 20 and 100 worst days boosts terminal wealth by 150%, 373% and 26,532%, respectively.
By having a quantified process indicating when to sell, profits may be captured, losses may be minimized, and the chances of
holding an equity through a "worst day" may be reduced.