How can long-term investors benefit from adaptive forecasting?
Value investors typically have a low turnover rate [less than 50% of their capital will be reallocated (traded) during a 12 month interval]. So, how does a value investor use adaptive forecasts? This document describes how to use forecasts that I am posting daily on the WWW. These stock and mutual fund forecasts are short to intermediate term in time duration. The typical trade duration is days to weeks. Occasionally, one of the stock or mutual fund trades will have a duration of a few months, but these long term trends are not frequent in recent financial markets. With an adaptive forecasting system, the forecasts will adapt to the market, and will reverse position (L to S or S to L) as needed to “stay on the profitable side of the market.” Most of my institutional-investor clients are value in investors. They do not trade frequently.
