A new model for gold

I have further refined the gold indicator; not yet published, but the manuscript is almost complete.

The new model produced significantly better returns than the original model did. An investment in gold according to the refined model’s signals produced a 14.91% compounded annual return from September 28, 1970 (the initial buy signal date) to November 23, 2012 (the last sell signal date), assuming no interest on cash when the model was not in gold. With interest at the Federal Funds rate from a money market account when the model was not in gold, the compounded annual return was 17.58%, equivalent to $100 growing to $92,785 over this period. The model’s returns are considerably better than a continuous investment in gold which would have produced only a 9.63% average annual return over this period, equivalent to $100 growing to only $4,837.

gold continuous investment $100 $4,837 9/28/1970 11/23/2012 9.63%
no interest when in cash $100 $35,209 9/28/1970 11/23/2012 14.91%
with interest when in cash $100 $92,785 9/28/1970 11/23/2012 17.58%
percent of time in gold 69.10%

This model is currently not invested in gold and waiting for a signal.

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