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Decade in review

One of the things I've been working on for this month's upcoming November newsletter is the report card we include every quarter on the performance of SMI's model portfolios. As I've been analyzing the data, one thing that has stood out to me is how different the experience of the past decade has been for "the market" vs. SMI's Upgrading strategy.

Over the past month, there have been quite a few "decade in review" type articles written. They've been spurred by a couple of recent events: the Dow re-claiming the 10,000 level (which first happened in March 1999), and last month's 10-year anniversary of "Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market" being published. Not surprisingly, as in this example, the main idea seems to be to point out what a waste of time the past decade has been for investors, since the market is stuck right back where it started a decade ago.

While that may be largely true for indexers and others who earned roughly the market's rate of return over the past decade, it's decidedly not true for those who followed SMI's Upgrading strategy. Over the 10 years ended 9/30/09, SMI's Upgrading model portfolio earned a total gain of 116.5%.

The media line is the past decade was a waste, that you're flat over the past decade.

The truth for Upgraders is that you've more than doubled your money over the past decade.

Quite a difference.

If you weren't following SMI's Upgrading strategy and find yourself with meager investment gains (or even overall losses) over the past decade, take hope. There is a better way to invest. You don't have to repeat the mistakes of the last 10 years in the decade to come.

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