Timing The Stock Market With The Conference Board Leading Economic Index

Summary

• This ETF trading model uses the Conference Board Leading Economic Index to determine “Risk-On” periods for equities.
• A universe is defined from the SPDR, Vanguard, and PowerShares ETF providers for the sectors healthcare, energy, communication, technology, and general multi-sector funds, holding large-mega cap stocks from the United States.
• The model selects 3 ETFs from the previously defined universe at the beginning of a “Risk-On” period and holds these ETFs continuously until the end of the “Risk-On” period.
• During “Risk-Off” periods for equities, it goes to the gold ETF [GLD] to maximize returns. ETF BND is also a suitable alternative to GLD.
• The simulation shows that this strategy would have produced over 7 times the total return of SPY with similar risk.

Garsya/iStock via Getty Images

This low turnover model uses a combination of a measure of the economic performance of the United States, market trend indicators, and momentum signals to identify three ETFs likely to perform best at a particular time. Thus, it is only

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.