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More Comparisons between Automatic Investor and the Buy & Hold StrategyAutomatic Investor thrives on volatility. In fact volatile stocks often have staggering returns -- and some of the most volatile stocks are in the technology sector. Following are the results from some widely held, popular technology and Internet stocks.
SummaryFor the period, Automatic Investor SIGNIFICANTLY beat the Buy and Hold strategy's returns. What's more, if you look at the Average % Capital at Risk column, you'll note that significantly less funds were in the market, on average (the Buy and Hold strategy keeps 100% of its funds in the market, and thus at risk). This means that there was less risk associated with the Automatic Investor returns.
In essence, Automatic Investor produced MUCH higher returns with LESS risk!
See the Index Study for details on how Automatic Investor performed, compared with the Buy and Hold strategy, on the DOW, Nasdaq 100, S&P 100 and S&P 500 indexes.
Simulation DetailsThe Historical Simulation was run under Automatic Investor version 2 Service Pack 1 using the Default Model. The study period was from October 9th, 1997 to October 9th, 2002 (5 Years). NO optimization was performed to enhance the results. The study assumed that all recommended trades were filled at the closing daily prices. The study did NOT include interest earned on the cash reserve (i.e. the no-risk cash portion of the Automatic Investor strategy) nor did it include dividends, but it did take into account commissions for each trade. A fixed $10 per trade commission charge was assumed. Tax considerations were ignored. The study results listed above represent simulated computer results over past historical data, and not the results of an actual account. Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. Past performance does not guarantee future results. Current performance may be lower or higher than the performance stated. Please read the Terms and Conditions before using any information contained in this study.
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