Improving on Buy and Hold: Updated Model Description

The IBH stock market model was updated several times since its original publication in August 2010.  Some of the updates were published in Advisor Perspective, and others were published in the weekly newsletter.  The IBH model incorporating the latest updates produced a compound average annual return of over 13% from 1966 to 2013 (excluding dividends),  and its fully described  in the document below:


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6 comments on “Improving on Buy and Hold: Updated Model Description
  1. lance92646 says:

    This is an excellent summary.

    Since the EMA crossover is so critical to the sell signal trigger, it would be helpful to have them posted on the site.

    I have double checked my calcs to track with the EMAs but cannot confirm the crossover on my end.

  2. geovrba says:

    I am working with the “Sandy” adjusted WLI as per update 1/25/2013. When using the ECRI WLI without this adjustment it is possible that the EMA crossovers could differ between our models.

    • specoletta says:

      Dear Georg,
      thanks for the valuable work,and continuous development to improve the system IBH, but I’m a little confused .. with the new update seems to have been many more sell signals (sell a),the signals sell a, are signs of short market if I am not mistaken? instead the basic sell was only the output from investment in progress, waiting for a future investment .. However, looking at the statistics of the signals generated to sell, they are not as profitable as they are buying signals .. maybe it is better to sell the market only in the presence of sell c signal, which statistically has given good results?! and sell a signals is better to remain flat while waiting for a future buy? thanks ..

  3. geovrba says:

    Thank you for this comment. Since the great recession the IBH model is not as reliable as it was before. This is because the IBH model relies on the ECRI Weekly Leading Index and its growth rate to generate signals. We have now concluded that the WLI is impaired. You have noticed that the sell C can be trusted more than the basic sell and sell A. Sell C is almost a recession indicating signal, and long term investors will also do well by following sell C only, or following the recession signal from COMP.

    • specoletta says:

      thanks for the reply, so now will be ‘revised WLI and consequently the signals can change?,
      and all his IBH model will be’ revised? sell c signals are in fact more ‘reliable as well as buy signals have been very correct .. good job

  4. lance92646 says:

    I have double checked the WLI and WLIg data and adjusted for Sandy as you suggested. This did not change the crossover discrepancy I mentioned. I would like to track the IBH EMAs along with the model; thank you for your caveat.
    I hope you will show your EMA values. I know you don’t have time to figure out why my figures are not matching with yours. Perhaps if you show the values each week, I can figure out where I am getting off track. Thanks.

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