Is it Time Again to Time Stocks Again?

by | Sep 12, 2018 | Archives

Is it time to time stocks?

When the Dow Jones industrial is at or near an all time high is it time to do some market timing?

The Dow is at an all time high and is enjoying its longest bull trend… ever.

100 years of the Dow Jones Industrial chart from

Should we get out of markets altogether or swap US shares for equities in better value markets?

Certainly one wants to seek good value, but decisions should not be made on market timing whenever possible.

I have been reminded of this in the annual “Risk & Return Characteristics of Selected Asset Classes” review by Keppler Asset Management.   This review gives us “Key Considerations for Asset Allocation Decisions”.

In a recent lesson sent to our Purposeful Investing Course (PI) subscribers we quoted ENR Asset Mamangement’s CEO Eric Roseman who wrote:

We recommended avoiding emerging markets heading into 2018 and that advice remains the
same now. This has been a dreadful year for emerging markets. Investors have barely made
money in this asset class over the past 20 years, adjusted for inflation, and even in nominal
terms. Though I don’t advocate trading a portfolio, knowing when to be in and out of emerging
markets has been critical to delivering positive returns since the early 1990s or at the very least,
avoiding significant capital losses.

This advice reminds me of a Keppler Asst Management once a year review of the “Risk & Return Characteristics of Selected Asset Classes”.

The chart below from this 2018 review shows that large US stocks certainly outperformed US bonds, gold and housing in the long term.


This study also shows that short term decisions about these stocks have the highest risk and that statistically have a risk of loss of up to -67% if the decision is held for only one year.

Time is the key.  Stocks dramatically outperform all other forms of investment in this study, but a global index of stocks are the riskiest investments and have the greatest potential for loss if held for less than ten years.

The following chart shows how great the risk is on year one.


Risk Versus Reward

Equities offer the highest potential return.  Equities also offer the greatest risk in the short term.   If one can invest with a ten year horizon… the study suggests that there is almost no risk and a guarantee of the best return. You can see this clearly in the next chart.


There is a 25% chance of loss in the first year, but only an 9% chance of loss with bonds and a 3% chance of loss with T-Bills.

In a five year horizon there is no chance of loss with US bonds or T Bills but still a 13% chance of loss with equities.

We can see similar ratios if we wait for the highest return in stocks, bonds or T Bills.


Using time, instead of market timing makes sense as the chart below shows.


This study can be enormously helpful in determining how to structure your savings.

First, let’s look at what to take into account.

This is a study relating to large US stocks, bonds and T-Bills over the past 87 years.  US Debt, growth and risk characteristics will differ in the next 87 years.   This study is a guide to understanding how time changes the risk reward relationships of stock versus bonds and T Bill investments in an economy with characteristics similar to US over the past 87 years.

Second, take into account how much time your investments have until redemptions are required.

If you know that you’ll need to liquidate within a year, can you afford  to absorb as much as a 67% loss?

Third, take into account the type of redemptions… are they big chunks to pay off mortgages or pay for university fees, etc. or smaller monthly chunks to provide income.

Fourth, take into account how much you can afford to lose.  Will a small loss throw your budget into turmoil or if you lose half of your capital will you still be okay?

Fifth, do you have enough to layer your investments so bond investments can provide short term withdrawal requirement and equity investments can be left alone for more than five and ideally up to ten years?


The Only 3 Reasons to Invest


The stock market has always been the best place of places to protect and increase wealth over the long haul.   Yet it’s also been the worst place to lose money, a lot of it, quickly.

There are only three reasons why we should invest.  We invest for income.  We invest to resell our investments for more than we had invested.  We invest to make our world a better place.

The goal of investing should be to stabilize our security, bring feelings of comfort and elimination of stress!

We should not invest in social networked protests that guarantee loss either.  This is like burning our houses down in protest.

If we want to change the world, we should invest in good equities that bring profit and use the extra wealth to create something beneficial for mankind.

We should not invest for fun, excitement or to get rich quickly. We should not divest in a panic due to market corrections.

This is why my core stock portfolio consists of 16 shares and this position has hardly changed in five years.  During this time we have been steadily accumulating the same Top Value ETFs  and have traded only a few times.

The study below shows a value based model portfolio that dates back to 1969 has dramatically outperformed almost every stock market in the world.


A hundred US dollars invested in that portfolio in 1969 grew to be worth $44,833 compared to $100 invested in an equity weighted world index being worth only $11,548.

No matter how we look at it, over time, value investing always wins!

Our portfolio is built around a strategy that’s taught in my Purposeful Investing Course (Pi).  I call these shares my Pifolio.  The course shows how to use the value analysis of Keppler Asset Management to create a portfolio of ETFs that cover undervalued stock markets.  I have combined my 50 years of investing experience with the study of the mathematical market value analysis of Michael Keppler, CEO of Keppler Asset Management.

In my opinion, Keppler is one of the best market statisticians in the world.  Numerous very large fund managers use his analysis to manage billions of dollars in funds.  However because Keppler’s roots are in Germany (though he lives and operates from New York) all of his funds are registered for the European Union citizens, Americans cannot normally access his data.

I was lucky to have crossed paths with Michael over 25 years ago, so I am one of the few Americans who receive this data so I can share it with Pi subscribers.

The Pifolio analysis begins with Keppler’s research that continually monitors 46 stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return.  Keppler looks at these numbers and takes market’s history into account.

Fwd: keppler

Michael Kepler CEO Keppler Asset Management.

Michael’s analysis is rational, mathematical and does not worry about short term ups and downs.  Keppler’s strategy is to diversify into an equally weighted portfolio of the MSCI Indices of each good value (BUY) markets.

This is an easy, simple and effective approach to zeroing in on value. Little time, management or guesswork is required.  You are investing in a diversified portfolio of good value indices.

A BUY rating for an index does NOT imply that any one stock in that country is an attractive investment.  This eliminates the need for hours of research aimed at picking specific shares.  It is not appropriate or enough to instruct a stockbroker to simply select stocks in the BUY rated countries.  Investing in the index is like investing in all the shares in the index.  You save time and gain incredible diversification because all you have to do is invest in the ETF to gain the profit potential of the entire market.

To achieve this goal of diversification the Pifolio consists of Country Index ETFs.

Country Index ETFs are similar to an index mutual fund but are shares normally traded on a major stock exchange that track an index of shares in a specific country.  ETFs do not try to beat the index they represent.  The management is passive and tries to emulate the performance of the index.

A country ETF provides diversification into a basket of equities in the country covered.  The expense ratios for most ETFs are lower than those of the average mutual fund so they provide diversification and cost efficiency.

Here is the Pifolio I personally held at the beginning of 2021.   There have been no changes since.

70% is diversified into Keppler’s good value (BUY rated) developed markets:  Germany, Hong Kong, Italy, Japan, Norway, Singapore, Spain and the United Kingdom.

30% of the Pifolio is invested in Keppler’s good value (BUY rated) emerging markets: China, Brazil, Chile, Colombia, South Korea, Malaysia and Taiwan.

There is one trick Pi subscribers learn about China which is different from the rest of the funds.

iShares Country ETFs make it easy to invest in each of the MSCI indicies of the good value BUY markets.

For example, the iShares MSCI Germany (symbol EWG) is a Country Index ETF  that tracks the investment results of the MSCI Germany Index. The fund invests at least 80% of its assets in the securities of its underlying index that primarily consists of all the large-and mid-capitalization companies traded on the Frankfurt Stock Exchange.

iShares is owned by Black Rock, Inc. the world’s largest asset manager with over $4 trillion in assets under management.

There is an iShares country ETF for every market in our Pifolio.

This year I celebrate my 53rd anniversary of writing about global investing. Our reports and seminars have helped readers have better lives, with less stress yet make fortunes during up and down markets for decades. This information is invaluable to investors large and small because even small amounts can easily be invested in the good value shares we cover in our seminar.

How you can create your own good value strategy.


Stock and currency markets are cyclical.  These cycles create extra profit for value investors who invest when everyone else has the markets wrong.  One special part of your course looks at how to spot value from cycles. Stocks rise from the cycle of war, productivity and demographics.  Cycles create recurring profits.  Economies and stock markets cycle up and down around every 15 to 20 years as shown in this graph.

The effect of war cycles on the US Stock Market since 1906.

Bull and bear cycles are based on cycles of human interaction, war, technology and productivity.  Economic downturns can create war.


The chart above shows the war – stock market cycle.  Military struggles (like the Civil War, WWI, WWII and the Cold War: WW III) super charge inventiveness that creates new forms of productivity…the steam engine, the internal combustion engine,  production line processes, jet engines, TV, farming techniques, plastics, telephone, computer and lastly during the Cold War, the internet.  The military technology shifts to domestic use.  A boom is created that leads to excess.  Excess leads to correction. Correction creates an economic downturn and again to war.

Save $124.50 If You Act Now

Subscribe to the first year of The Personal investing Course (Pi).  The annual fee is $299, but to introduce you to this online, course that is based on real time investing, I am knocking that down to $174.50 in this special offer.  Plus I am reducing annual renewals from $299 to only $99.

I would like to send you, on a no risk basis, a 130 page basic training course that teaches the good value strategy I use.   I call this strategy Purposeful Investing (PI).  You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

You get this course when you enroll in our Purposeful Investing program (Pi) with a triple guarantee.

Triple Guarantee

Enroll in Pi.  Get the 130 page basic training, a 46 stock market value report, access to all the updates I have sent in the past five years right away, plus numerous updates over the next year. 

#1:  I guarantee you’ll learn ideas about investing that are unique and can reduce stress as they help you enhance your profits through slow, worry free, easy diversified investing.

#2: I guarantee to send you monthly updates that are based on a study of every share in 46 stock markets around the world.  These updates will show the values, the earnings of all these markets and categorize each market as Top Value (buy), Neutral Value (hold) or Poor Value (sell)

#3:  If you are not totally happy, simply let me know. I guarantee you can cancel your subscription within 60 days and I’ll refund your subscription fee in full, no questions asked.:

You have nothing to lose except the fear.   You gain the ultimate form of financial security as you reduce risk and increase profit potential.

When you subscribe to Pi, you immediately receive a 120 page basic training course that teaches the Pi Strategy.   You learn all the Pi strategies, what they are, how to use them and what each can do for you, your lifestyle and investing.

You also begin receiving regular emailed Pifiolio updates and online access to all the Pifolio updates of the last five years so you can back track if you desire.  Each update examines the current activity in a Pifolio, how it is changing, why and how the changes might help your investing or not.

Subscribe to a Pi annual subscription for $174.50 and receive all the above.

Your subscription will be charged $99 a year from now, but you can cancel at any time.