Vanguard Strategy for Capital Managers

higher ed icon“…expectations manifest themselves in the trends of price!”

Vanguard Strategy is an intermediate to long-term trend follower.  It is suitable for capital managers, both family and corporate.

TMT’s philosophy is that market prices, rather than market fundamentals, are the key aggregation of information needed to make investment decisions. In other words, a valid and naturally profitable strategy is priced based, technical analysis.

The markets are nothing more than people’s expectations, and these expectations manifest themselves in the trends of price.

While predicting the future is hit or miss and for most people, it is a miss, especially in an uncertain world. Therefore, identifying and following a trend is one of the few reasonable investment approaches over the long term.

Vanguard Trader is an intermediate term trader, with an average holding period of four (4) months. Since there is an overwhelming, desire to act in the face of adverse market moves, Vanguard Trader works to catch them with a re-entry after a short-term correction.

The use of multiple data streams helps the very long-term trader avoid the volatility without taking its eyes off the longer-term trend.

Vanguard is 100% price based so there is no desire to have “close MONEY stops” to preserve open trade equity. Vanguard lets short bars take you out for the short term and longer bars get you make in with the longer-term trend.

The goal is to avoid the tremendous costs over the trading year of being Money Stopped Out of long-term trends. Vanguard’s goal is to reduce the occurrence of a position stopped out in the middle of a long-term major move.

What I have repeated on these pages and in my blog / newsletter post is there is no perfect way to capture the move. For example from $800/ounce to $1,800/ounce in gold. It is ok to forecast and be right in your forecast but how does price get there, this is the key.  Yes, we do have repetitive patterns (fractals) that in part answer those questions in support of our members.

However, the way to make money believing in a forecast is to use a system that follows the trend of that market year in and year out!

Markets react to news daily / weekly, but ultimately the major change takes place over time. Trends develop because there is an accumulating consensus on future prices, consequently there is an evolution to the forecast, and the believed true price will unfold over time.

To succeed never doubt what I call “First Principles.”

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Jack F. Cahn, CMT