You may have noticed lately that the world – including the investment world – has become increasingly hard to predict. Who thought we’d see Great Britain leave the EU, Trump win the White House, or Apple jump almost 50% in just 6 months?
For many years, our Aftershock books have been pointing out the vulnerable bubbles in our economy and predicting a big worldwide bubble-popping mess ahead. Certainly nothing has happened to change our macro point of view. In fact, the stock market, debt, housing, and dollar bubbles are now bigger than ever. The coming Aftershock has not been cancelled, and when all these bubbles begin to fully pop, we are well positioned to maximize protection and profits.
But what about in the shorter term – before the Aftershock? Making wise investment decisions in this current enviornment can be challenging, to say the least. With stocks at all-time highs, oil falling, interest rates rising, good-paying jobs more scarce, big tax cuts coming (or maybe not coming), political fireworks in Washington, and many technology equities booming despite never making a dime, is now a good time to exit the market, stay the course, or double down for the next big rally?
In the shorter term, it’s impossible to know, day-to-day, what’s coming next.
Introducing The Ark Portfolio Navigation System
Rather than trying to guess what will happen next in this very unpredictable investment environment, we now have a powerful proprietary trading system to help guide us every step of the way.
The Ark Portfolio Navigation System is not computerized or a pre-programmed “robo advisor. Real human beings – the authors of the Aftershock books – make all our trading decisions. But we don’t go it alone. Among our multiple indicators, we now have a powerful tool to help us identify newly developing price trends in any asset.
And it’s only for Ark clients. No one else has it.
What is the Ark Portfolio Navigation System?
The Ark Portfolio Navigation System combines financial and economic modeling and advanced charting techniques to give us clear “Buy” and “Sell” signals. These buy and sell signals do not automatically force a trade; they alert us in real time to the early development of a new up or down trend in an asset’s price.
To capitalize on a developing trend, we need to catch it as early as possible, without going in too early and then later discovering it wasn’t really a trend after all. While no trading system can see the future before it happens, this tool is like having X-ray vision into the early stages of a newly developing trend. It helps us ignore the “noise” (the hourly and daily movements) and see the structural “bones” of a potential new up or down trend as it forms.
How Does It Work?
To see our proprietary trading system in action, please take a look at the chart below of the Dow Jones Industrial Average, represented here by the ETF “DIA”.
The Dow Index (DIA) since February 2016
In the chart above, the vertical green and red lines indicate “Buy” and “Sell” signals. It’s important to understand that we did not just pick good spots to place the Buy and Sell signal lines, these lines were entirely generated by our trading system.
Looking at the chart of the Dow, we can see there were four clear Buy signals in the last year or so. For the purposed of discussion, we’ve marked the Buy lines as A, B, C, and D. Here’s how well each of these Buy signals correlated with the early stages of a new market uptrend:
- Buy signal A occurred early
- Buy signal B came in early July
- Buy signal C popped up right after the presidential election in early November. Again, when few expected it.
- Buy signal D occurred in late April, after the market fell and went flat in March.
Again, just to be clear, we did not draw these green lines in by hand based on 20/20 hindsight. The Ark Portfolio Navigation System placed these Buy signals on the chart on its own – and it did so just at the time when buying would have been a very good idea, while also avoiding the down or flat periods. The system is that good.
And here’s the great news: We have now analyzed and generated these clear Buy and Sell signals on dozens of assets, including stock indexes, sectors, subsectors, individual companies, various commodites, foreign assets, and more. And we produce more charts every day, as we need them.
Sounds Good, But Does It Really Work?
Yes! While no trading system (or human) can predict the future or “time” the market perfectly, extensive 3-year back testing on more than 50 assets deomonstrates that our trading system is accurate about 80% of the time.
Even better than successful back-testing, the Ark Portfolio Navigation System has proven itself in real time. While we cannot give you specific performance figures for individual Ark clients, which vary based on their particular holdings, our Ark “Model Portfolio” has made gains every month since we transitioned to the new trading system in mid-January 2017.
And we made these gains while keeping an unusually large position in cash during this time in order to keep market risk exceptionally low. For example, the Model Portfolio earned more than 1% in the month of May – despite holding about 80% in cash. That means the Ark Portfolio Navigation System works very well indeed.
The Aftershock Has Not Been Cancelled
While we seek to capitalize on shorter term trends, both up and down, we have not in any way lost sight of the bigger picture. The condition that led us to predict in our books (beginning in 2006) the crash of 2008 and an even bigger future bubble pop have gotten even worse today:
- National debt over $20 trillion
- Annual budget deficit of almost $600 billion and growing
- Quintupling of the US money supply
- Slowest economic growth in years
- Asset bubbles at near all-time highs
- Chinese economy, the world’s economic engine after the 2008 Financial Crisis, slowing substantially
- Consumer spending slowing down
- Interest rates rising
- Massive money printing continuing in Europe and Japan
We could go on and on, but you get the picture: the coming Aftershock has not been cancelled. We are watching very carefully as the world moves closer.
But even if we didn’t see it coming, our powerful trading system will help us. The Ark Portfolio Navigation System can alert us to any significant downtrend in any asset or asset class, such as stocks and bonds, even in the unlikely event that we don’t realize the Market Cliff is near and the Aftershock is starting.
What If the Market “Melts Up” Instead of (or Before) It Melts Down?
Given what we’ve already seen with the unexpected Trump rally and historically very high stock values, anything is possible. If the stock market melts up from here, great! Our trading system will help us make money on it.
And if and when the market melts down, we expect to catch the big trend as well. In fact, we expect the Ark Portfolio Navigation System to help us earn even more in the downturn when we can short key stock indexes while almost everyone else will likely sustain massive losses.
The Bottom Line
The Ark Portfolio Navigation System combines financial and economic modeling with sophisticated charting techniques to identify new up or down trends – both fundamental and interim trends – in real time. Because we have what we believe to be the equivalent of a reliable GPS to get in and out of positions closer to the beginning of new trends, we feel we are more likely to respond successfully to just about any trend in any asset, whether we are anticipating it or not.
No trading system can predict the future or perfectly time the market. By identifying the early stages of a developing trend in real time, we can go “long” on the way up and “short” on the way down
The bottom line for the Ark Portfolio Navigation System is that you are likely to be a lot happier with your bottom line.