Dr. Pankin manages client accounts, using the business name MDP Associates LLC, in several "programs" that invest in mutual funds or in stocks in the Dow Jones Industrial Average. Some of the mutual fund trading programs are "aggressive" in that they strive for above market returns and may have greater than market risks. However, various risk reduction tactics are employed to manage the risks and try to keep them to a level that justifies the potential rewards that the strategies are capable of producing. A program that started in Decmeber 2001 to trade the Rydex Sector funds called STAR (Sector Trading Adverse to Risk) emphasizes risk reduction, but also has an objective of acheiving returns at least that equal or exceed those of the S&P 500 index. He uses well researched, mechanical trading systems that enable the discipline necesssary for successful investing. In late 2004, I began to offer a more aggressive option for trading these funds. Due to the frequent trading, Rydex sector funds belong in retirement accounts such as regular and Roth IRAs.
In contrast, the Dow Turnarounds program works well in taxable accounts. It invests only in the thirty stocks in the Dow Jones Industrial Average. These stocks are the bluest of the blue chips, are leaders in their industries, and have enormous financial strength. Consequently, these companies are quite likely to survive troubled times, and their financial resources and strong market positions should enable them to solve their problems. That means purchasing depressed shares in the Dow components should be quite profitable over the long term. Some patience will be required because it may take several years until a company and its stock price see better times. On the other hand, the longer anticipated holding periods may have tax advantages.
A new managed account service called Tactical Asset Allocation that started in 2004 takes a broader view and is suitable for the entire portfolio, especially for retirement plan accounts such as 401(k) plans and the various types of IRAs. Perhaps the most outstanding feature of this service is that it has been designed to protect account assets during long-term, sometimes called secular, bear markets. The methods have been validated by seeing how they would have worked during the last one in the 1966-81 period. It is quite likely that another one began in early 2000. Details are provided in the Perspective from the 2003 Fourth Quarter client newsletter, which is linked below.
For each of the four managed account programs, there is a brief (three pages or fewer) description that includes investment returns through 2006. In some cases, more information is available.
[Note: The brief descriptions and some other documents need Adobe Acrobat Reader to view or print, but that program is likely on your computer already, and if not, it can be downloaded for free from www.adobe.com.]
Please send an e-mail to managed2 -ATsign- pankin.com for additional information about the use of the systems or Pankin's managed account services.