FAQs Frequently Asked Questions
Dr K Market Direction Model
How has the model performance vs. buy & hold over the last few years in this QE to no-QE environment?
Quantitative easing has made it difficult for most all models to beat buy and hold since markets have tended to take three steps toward, two steps backward as a standard. The Market Direction Model however has soundly outperformed since the model made a change in Feb 2019 (4+ years) after getting whipsawed prior to this change in this 3 steps forward, 2 steps backward environment. In consequence, the MDM's buy and sell signals using TECL as a benchmark have resulted in a return of about 4.94x (15.94/3.23) compared to buying and holding TECL which was up only about 2.75x.
With markets hit hard in 2022, the MDM stayed on a sell signal for much of the year, thus one's risk was substantially mitigated by profiting in a year such as 2022.
First published: | 28 Mar 2023 |
Last updated: | 28 Mar 2023 |