Richard Russell No Longer Believes in Market Timing

By on April 28, 2011

Awhile back Carlos X. Alexandre wrote a nice article featured at Seeking Alpha regarding the impressive results of a simple market timing strategy utilizing the 200 day moving average. 

Alexandre also commented on Richard Russell’s throwing in of the towel on market timing.  Russell, the founder of Dow Theory Letters, happens to be one of the most famous market timers in the history of the markets. 

Alexandre latched onto a Mark Hulbert revelation that Russell had decided to settle on investing the majority of his assets under management in a mutual fund that has a static allocation to a number of uncorrelated asset classes.  Alexandre demonstrates the long term ineffectiveness of a non-correlated asset class mutual fund mentioned by Hulbert; the Permanent Portfolio Fund (PRPFX).

Alexandre’s point is that many so-called financial gurus and asset managers hide behind complex “strategies” that are in many instances inferior to simpler market timing techniques.

Source: Seeking Alpha

One Comment

  1. New Low Observer

    April 30, 2011 at 7:45 pm

    Greetings SMA,

    Russell’s apparent departure from needing to time the market took place long ago. With $2 million a year from the newsletter alone, Russell can say almost anything and not worry about the impact to his bottom line.

    However, if he really isn’t in the business of market timing then his newletter should be called “The Non-Correlating Asset Letter” instead of the Dow Theory Letters. The whole purpose of Dow Theory is to reallocate resources according to Dow Theory signals.


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