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Currencies Impact Stock Market Profits

2015 started with an eventful January. The continued decline of the Euro versus the US Dollar had a major impact on the stock markets around the world.

During January, the German DAX gained 9.1% and the S&P 500 lost 3.1%.
However, this is before taking into account the impact of currency price developments.

Measured in Euros, the German DAX gained 9.1% during January. However, measured in US Dollars the DAX only gained 1.7% during January.

Measured in US Dollars the S&P 500 lost 3.1% during the month. However, measured in Euros, the S&P 500 gained 3.9%.

 

Stock Market Profits in Dollars and Euros

 

European investors gained during January, regardless if they invested at home or in the US markets.

Trend Investing Whip-Saw Reality

On August 8th, our MA200S trend signal for the German DAX index turned down. The MA200S is not a signal that we normally publish. However, since I am acting on it myself, I think I owe you this type of information for transparency reasons.

 

Yesterday after the big up-swing in European stock market indices, the MA200S for the DAX has turned up again. Thus next week, I will invest again in DAX related index funds.

 

This movement in the DAX and the MA200S trend signal is a typical example of whip-sawing.


This happens. The signal indicated that the long-term trend is moving down. And then the price action reverses and the signal turns back up again within a matter of weeks or months.

 

Not Trend Following But Trend Investing

There is Trend Following and there is Trend Investing. There are similarities and there are differences. Sometimes one is better and sometimes the other one is more feasible.

For Trend Following, the best source is probably the podcast and blog of Michael Covel. For any trader in the financial markets, this is a must listen and read.

In general Trend Following the financial markets has the following characteristics:

 

How to Invest My Savings Safely for Good Long-Term Returns?

How to invest my savings in a reasonable safe way to get good long-term returns on my investments? That is the main problem I wanted to address.

And there are a few additional requirements that restrict the possible solutions to this problem:

Does Trend Trading the ASX Work?

One of our readers asked us what the performance is of our flagship MATI trend signal for the Australian ASX index. This question came following our blog post on the turn around dates for the MATI for the S&P 500.

See below our response to the various questions our reader was askling us. We think it could be of interest to you as well.


Australian ASX Trend Trading Chart


Below and attached is an overview of when the MATI turned up and down since the beginning of 2006.

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