Tool in the Crib #98 - Wall Street Traffic Light

http://www.wallstreettrafficlight.com/

The Wall Street Traffic Light, a new investment strategy explained in hisbook, provides specific answers to those questions. The strategy is best suited to 401(k) and IRA investors (because of their tax advantage), but other investors also may find it to be useful.

The Wall Street Traffic Light (WSTL) strategy is based on historical patterns of the S&P 500 Index—the broad-based, large-company index of U.S. stocks that serves as a widely-used barometer of the market. By looking closely at the annual returns and short-term movements of the S&P 500 over time, he found four recurring patterns that will help guide investors today. In his book you will discover this important, scientifically-tested history lesson: For every rolling decade during 1935-2009 (1935-1944, 1936-1945…2000-2009) the WSTL strategy has achieved higher returns and took lower risk compared to buying-and-holding the S&P 500. That is “sleep well” performance indeed.