Buy--DON'T Hold: Investing with ETFs Using Relative Strength to Increase Returns with Less Risk [Hardcover]

Leslie N. Masonson (Author)

Book Description

ISBN-10: 0137045328 | ISBN-13: 978-0137045327 | Publication Date: April 19, 2010 | Edition: 1

Buy-and-hold investors hope for the best over the long-term, but unfortunately, every three to four years, like clockwork, bear markets decimate their portfolios. In the last decade, there were two devastating bear markets that wiped out 50% of investor  portfolio values, not once but twice.  These huge losses resulted in millions of investors having to delay their retirement plans, postpone funding of college education for children and grandchildren, and delay life’s many joys. You simply can't afford to be invested during these inevitable, large-scale declines. Now, you can use an easy-to-use investing strategy that delivers better returns with far less risk than "buy and hold." Leslie N. Masonson, stock market investor, researcher and author, helps you regain control over your portfolio using low-cost, low-risk, ETFs selected with his unique “Stock Market Dashboard" that reliably signals market bottoms and tops - and can tell you exactly when to get in and out. When it is time to invest, Masonson shows how to use Relative Strength Analysis to purchase the strongest ETF market segments with the best growth potential. He provides a specific investing approach and strategy for individuals with three different levels of risk tolerance: conservative, moderate and aggressive. Replete with examples, Buy-Don't Hold contains all the easy-to-use information you need to craft an investing strategy that meets your needs, lets you sleep at night, and reaps rewards in bull and bear markets alike.

 

Stock Trader’s Almanac 2011 Top Investment Book

 

 

 

Editorial Reviews

From the Back Cover

“Masonson is a master Almanac Investor. In Buy—DON’T Hold, he shows investors and traders how to buy and sell the right ETFs at the right time with proven strategies, technical tools, and indicators.” --Jeffrey A. Hirsch, Editor-in-Chief, Stock Trader’s Almanac

 

“Masonson not only shows you when to be in and out of the market, but also which ETFs to buy and when to sell them. This is a complete investing program that all investors can benefit from. I expect the vast majority of readers will agree with me that this book is a ‘Strong Buy.’” --Price Headley, CFA, CMT, Founder of BigTrends.com

 

“The author provides investors with a step-by-step investing plan that focuses heavily on protecting principal, while at the same time offering a systematic approach that will help investors meet their goals and stay on the right side of the market. Buy—DON’T Hold offers an effective strategy that can make a huge difference in an investor’s bottom line.” --Paul Merriman, Founder of Merriman, a Seattle-based investment advisory firm; Editor of Fundadvice.com and the Sound Investing podcast

 

“Masonson is a highly regarded stock market researcher who provides investors with his discerning perspective on an ETF investing strategy using relative strength. In this succinct and sharply focused book, Masonson develops a logical and easy-to-use strategy with all the necessary steps to maximize returns while ably managing risk.” --Nelson Freeburg, Editor of Formula Research, a financial newsletter that develops systematic investment models for stocks and bonds

 

“My 40 years of experience has convinced me that relative strength is one of the very best methods of managing portfolios. Exhaustive research shows that investments that have demonstrated the highest price strength over a significant past period are likely to outperform the market going forward. Buy only the strongest investments and hold these as long as they stay strong. Masonson’s easy-to-read book shows you a workable way to execute this winning method.” --Robert W. Colby, CMT, Chairman of Robert W. Colby Asset Management, Inc.; author of The Encyclopedia of Technical Market Indicators, Second Edition

 

Why Buy-and-Hold Doesn’t Work Anymore--and What to Do Instead!

Every few years, like clockwork, devastating bear markets decimate buy-and-hold portfolios. In the last decade, they’ve wiped out 50% of investor portfolio values...not once, but twice. Millions of investors have been forced to delay retirement, postpone funding college education for their children and grandchildren, and defer life’s many joys. You can’t afford to be invested during these inevitable, massive declines--and you don’t have to be.

 

In Buy--DON’T Hold, financial consultant Leslie N. Masonson introduces an easy-to-use investing strategy that delivers better returns with less risk than buy-and-hold.

Masonson shows you how to regain control over your portfolios using low-cost, diverse ETFs se­lected with his unique Stock Market Dashboard. You’ll learn how to reliably identify market bottoms and tops, so you know exactly when to get in and out. When it’s time to buy, Masonson helps you choose the most suitable ETF market segments with the maximum profit opportunity. He spells out exactly when you need to sell, as well, to protect your hard-earned cash.

 

Whether you’re a conservative, moderate, or aggressive investor, Masonson presents specific investing approaches customized for you--so you can meet your goals in bull and bear markets alike.

• Discover the powerful and accurate Stock Market Dashboard
  Eight “go/no-go” indicators that identify major market shifts in time to act
• The many advantages of investing in a select group of ETFs
  ...and how to make them work even better for you
• Choosing the right sectors at the right time
  Mastering the powerful relative strength analysis technique
• Putting it all together
  Your personal investing plan: a six-step roadmap for success
• How to avoid market downturns that will demolish your hard-earned gains, again and again
• How to use ETFs with momentum to improve your returns with reduced risk in any market conditions
• How to determine whether you are a conservative, moderate, or aggressive investor 
  

About the Author

Leslie N. Masonson, MBA, CCM, is President of Cash Management Resources, a financial consulting firm that he founded in 1987. Masonson’s 40-year working career has spanned financial advisory services, trading, investing, banking operations, management, teaching, and cash/treasury management consulting. From 2004 through 2009 he was also a Financial Advisor offering investment management services to retail clients. Earlier in his career, he worked at the large banks for a total of 17 years as a Vice President at Citibank, an Assistant Vice President at Bank of America, and an Assistant Secretary at Irving Trust Company.

 

He has written more than 50 articles, including interviews with traders, as well as product and book reviews for numerous financial publications, including Technical Analysis of Stocks & Commodities, Active Trader, and Futures magazine. He has lectured on investing on Crystal Cruises, Celebrity Cruise Line, and Norwegian Cruise Line. In November 2003, he was a speaker at the Intershow Online Investor’s Expo, where he spoke on “Successfully Trading Stocks for a Living.”

 

Masonson has been studying the stock market for more than 50 years. He has invested in mutual funds, stocks, options, futures, and commodities. Masonson has read more than 500 books on investing and trading, and he is proficient in technical analysis. He has used many investing and trading software programs over the years, including Telescan, OmniTrader, DTN, TradeStation, ULTRA, VectorVest, and High Growth Stock Investing, as well as many charting, investing, and trading sites on the Internet.

 

He has been interviewed on business radio stations, as well on cable TV on the Financial News Network and CNBC. He has been interviewed by The Wall Street Journal, USA Today, Institutional Investor, Bottom Line/Business, Inc., Las Vegas Review-Journal, and Advertising Age. He has previously authored the following books: All About Market Timing: The Easy Way to Get Started, (McGraw-Hill, November 2003), Day Trading On The Edge: A Look-Before-You-Leap Guide to Extreme Investing, (AMACOM, 2000), Cash Cash Cash: The Three Principles of Business Survival and Success, (HarperBusiness, 1990), Corporate Cash Management: Techniques and Analysis, (Dow-Jones Irwin, 1985. Coedited with Frank Fabozzi), and the Corporate Treasury Management Manual (A.S. Pratt & Sons, 1998. Editor and Contributor).

 

Masonson, a permanently Certified Cash Manager (CCM), was elected to the American Management Association’s “Wall of Fame” in 1989 for his contributions to teaching financial management principles to 2,600 financial managers since 1978. In addition, he has prepared and delivered training and seminars on cash management to participants at the Center for Professional Education, Treasury Management Association, Institute of Management Accountants, AICPA, Financial Executives Institute, and Healthcare Financial Management Association.

 

He has authored more than 50 articles on corporate cash management in the following publications: Management Review, Boardroom Reports, Management Accounting, The Financial Manager, Chief Financial Officer USA 1988, Business Credit, Small Business Report, Financial Executive, Healthcare Financial Management, Investment Decisions, Pensions & Investment Age, Corporate Accounting, and Corporate Finance.

 

Masonson received a BBA in Finance and Investments from The City College of New York and an MBA in Operations Research from Bernard M. Baruch College. His master’s thesis title was “Statistical Evaluation of the Relative Strength Concept of Common Stock Selection.”

Product Details

• Hardcover: 240 pages
• Publisher: FT Press; 1 edition (April 19, 2010)
• Language: English
• ISBN-10: 0137045328
• ISBN-13: 978-0137045327
• Product Dimensions: 9.2 x 6.6 x 0.9 inches
• Shipping Weight: 13.6 ounces (View shipping rates and policies)
• Average Customer Review: 3.7 out of 5 stars  See all reviews (50 customer reviews)
• Amazon Best Sellers Rank: #131,530 in Books (See Top 100 in Books)
  • #29 in Books > Business & Investing > Industries & Professions > E-commerce > Online Trading

More About the Author

Leslie N. Masonson, MBA, CCM, is President of Cash Management Resources, a financial consulting firm that he founded in 1987. Masonson's 40-year working career has spanned financial advisory services, trading, investing, banking operations, management, teaching, and cash/treasury management consulting. Most recently, for the past six years he was a Financial Advisor offering investment management services to retail clients. Much earlier in his career, he worked at three large banks for a total of 17 years as a Vice President at Citibank, an Assistant Vice President at Bank of America, and an Assistant Secretary at Irving Trust Company.

He has written more than 50 articles - interviews with traders, and product and book reviews - for numerous financial publications, including Technical Analysis of Stocks & Commodities, Active Trader, and Futures magazine. He has lectured on investing on several cruise lines including Crystal, Celebrity, and Norwegian. In November 2003, he spoke at the Intershow Online Investor's Expo, on "Successfully Trading Stocks for a Living."

Masonson has been studying the stock market for more than 50 years. He has invested in mutual funds, stocks, options, futures, and commodities. Masonson has read more than 500 books on investing and trading, and he is proficient in technical analysis. He has used many investing and trading software programs over the years, including Telescan, OmniTrader, DTN, TradeStation, ULTRA, VectorVest, and High Growth Stock Investing, as well as many charting, investing, and trading sites on the Internet.

He has been interviewed on business radio stations, as well on cable TV on the Financial News Network and CNBC. The Wall Street Journal, USA Today, Institutional Investor, Bottom Line/Business, Inc., Las Vegas Review-Journal, and Advertising Age have interviewed him. He has previously authored the following books: All About Market Timing: The Easy Way to Get Started, (McGraw-Hill, November 2003 and translated into Chinese in February 2010), Day Trading On The Edge: A Look-Before-You-Leap Guide to Extreme Investing, (AMACOM, 2000), Cash Cash Cash: The Three Principles of Business Survival and Success, (HarperBusiness, 1990), Corporate Cash Management: Techniques and Analysis, (Dow-Jones Irwin, 1985. Coedited with Frank Fabozzi), and the Corporate Treasury Management Manual (A.S. Pratt & Sons, 1998. Editor and Contributor).

Masonson received a BBA in Finance and Investments from The City College of New York and an MBA in Operations Research from Bernard M. Baruch College. His master's thesis title was "Statistical Evaluation of the Relative Strength Concept of Common Stock Selection."

Customer Reviews

Most Helpful Customer Reviews

83 of 100 people found the following review helpful:

2.0 out of 5 stars All theories sound good - show me the data, July 3, 2010

By 

Doctor.Generosity (New England) - See all my reviews
(TOP 500 REVIEWER)    (VINE VOICE)   

This review is from: Buy--DON'T Hold: Investing with ETFs Using Relative Strength to Increase Returns with Less Risk (Hardcover)

(What's this?)

As an avid stock investor for 15 years, I can testify that these are treacherous times for individuals in the market, and it's getting worse. There are many factors working against mom and pop in the stock market. One is globalization. Yes, I can invest easily in the economy of Vietnam if I wish. But the downside is that my position in a manufacturing company located next door to my home has somehow become sensitive to a debt crisis in Greece or Portugal. These destabilizing factors make it less relevant which stocks or ETF's I pick. A second development working against the self-managed IRA is computer trading, which today accounts for 70% of all trades and soon may be 99%. It used to be that the market was made of human beings; now it's you against inscrutable robots running computer algorithms. In this environment, absolutely no one - none of the highly paid so-called experts - has been able to plot a rational course for success in equities. Otherwise, the endowment funds of Harvard, Princeton and Yale universities, which hire the most highly trained full-time professionals in the world, would not have plunged in 2008 along with my IRA and yours. If the head of the Harvard endowment, supported by the best available advice and analysis, can't figure it out, how can an ordinary civilian? The truth is that depending on the stock market for your retirement through a self-managed IRA has become highly dubious. Most folks, especially those with limited time to devote, would do better buying CD's even though the yield is low. At least you won't lose your money.

Against this dismaying background, there are nevertheless hundreds of books, websites, newsletters, and TV shows which purport to offer hot advice on how to invest successfully. The existence of so many diverse approaches to one problem tends to suggest that there is little agreement and no sure path. And there isn't. Ask about proof of efficacy for any of these principles or algorithms, and one tends to hear a deafening silence.

So now comes Mr. Masonson. His recommendations sound cautious, sensible and rational, and he seems like a nice, fatherly sort of man. His main point is that the classic advice of buy and hold is no longer tenable in today's crazy market. He believes we should invest in ETF's instead of individual stocks, and above all guard our principal by selling out of the market when certain bear market warning indicators light up. He then introduces two technical components; the first is the use of 'relative strength analysis' to rank ETF's. Fine. It all seems conservative and intelligent. And the second innovation is eight technical bull/bear signals, including Moving Average Convergence-Divergence and seven other technical indicators, which he calls his "Dashboard" suite which will predict when the market will go up or down for a long period.

Wait a minute. What was that? He has discovered technical signals that PREDICT when the market is entering a prolonged bear phase?? Wow, the holy grail of stock investing? This guy has done it!

Or has he. Folks, please remember this: all theories sound good. The only meaningful question is: Do they work? And not everyone agrees with the "Buy - Don't Hold" approach. The main sticking point is the accuracy of the buy/sell indicators. Many stock analysts will say it is impossible to time the market accurately enough, and that jumping out to cash when sell indications cross thresholds will also mean missing upward moves, which can happen in hours. So we have the usual dueling theories in one of those ongoing debates which are more like theology than engineering. Is it obvious which approach is correct? No, it is not obvious. This is quantitative; if the eight indicators give perfectly reliable signals, then yes, such a system will work - as will many others. But results very quickly deteriorate if the signals are off by even a little bit. Somewhere in the middle, there is a crossover point vis a vis buy-and-hold. So where, Mr. Masonson, is the statistical data that supports your strategy? How exactly did you identify these eight signals versus others? How did you verify they should have equal weights? Where is your proof? Is your book a report of painstaking research, or just a 'feeling' you have? I would be so much more impressed the author offered not anecdotes but evidence.

The book should at least have shown this was effective by back-testing. This means that the author would pick a date (say in 2005), use his relative strength rules to select a portfolio of ETF's, and then propagate the simulated portfolio forward using his stated sell and buy indicators at every stage. All the hindsight data is publicly available, and the analysis, although tedious, is not hard to carry out with a few big spreadsheets. The results should then be compared with buy-and-hold for the same portfolio, and perhaps other slightly variant strategies. Also, Masonson would then have a computer model and could study variations as well as the all-important question how sensitive the results are to the accuracy of the 'Dashboard.' (No doubt the answer is: very sensitive.) Without this research data Masonson has nothing. He is just a kibitzer, like all the others.

If I sound irritated it's because I am irritated. We are now five hundred years into the scientific revolution - and have learned that progress comes not from 'holding philosophies' however plausible they may sound, but from testing our ideas objectively and mathematically. And the whole subject of financial strategies is riddled with failure, serious failure causing great personal pain - even the Harvard Endowment Fund can't get it right. Even the CEO of Lehman Bros can't get it right. Even the Chairman of the Fed can't get it right. In this environment, investment advisors who offer philosophies but not real research, not even minimal back-testing studies, are just plain lazy. Two stars.

Personally, I am skeptical whether in today's environment an individual can succeed with any 'system.' Investing is about predicting the future, for which there can be no system. There is a universal mathematical truth about trading strategies; because the market is constantly scrutinized by large numbers of participants, any 'edge' which is discovered will over time become ineffective because it will be arbitraged by the market and washed out. In other words, if it works, everyone will soon be doing it and it will come to equilibrium and stop working. The time constant over which this can be expected to happen varies from days to months in most cases. I don't see how any short or medium term rules found in a book can carry meaningful 'secrets.'

Personal investors have only one edge over computers; long term judgement. Use your personal human judgement to identify long term trends and promising companies, and then - buy and hold.

(Note added later: After posting this I noticed that Masonson has a blog or website where he does report some preliminary back-testing (with mixed results). That's good but where I come from, people do the research BEFORE publishing the book.)

21 of 23 people found the following review helpful:

2.0 out of 5 stars Don't Buy or Hold this book - pick something else, December 26, 2010

By 

vancwa "vancwa" (Vancouver, WA) - See all my reviews

Amazon Verified Purchase

This review is from: Buy--DON'T Hold: Investing with ETFs Using Relative Strength to Increase Returns with Less Risk (Hardcover)

The book is a not a good use of money. I just finished the book and realized some things:

1. Much of the first half of the book explains mundane things that anybody buying the book would already know.

2. RS investing in ETFs is nothing new and there are several free sites (like ETFscreen.com) that already make that method of investing very accessible to anybody. I was already doing that. Bring something new to the table.

3. Anybody can cook up an investment theory. His "dashboard" is just a hodge-podge collection of technical indicators that has no substantive acedemic research or backtesting that validates them. Plus, all elements are given equal weighting no matter what is happening in the economy. Really? REALLY? If it were that simple, I wonder why an investment bank, a mutual fund company, or a hedge fund wouldn't have developed this years ago. Fidelity with thousands of equity analysts and strategists toiling day in and day out that can't come up with a model that works, but he can? hmmmmmmm

4. Even if the magic dashboard worked, you would need to collect the data from a multitude of different sites, plug it into Excel and get an indicator value. If the author had done any due diligence and had a site that actually collected these values for you and you could just look easily look at the historical value of the dashboard indicator compared to actual market performance or backtest it over a specific period of time, well - I would be interested in seeing that. As it is, this is just some guy with excess time on his hands just goofing around trying to come up with material to fill out a book.

Bottom line - if you are still curious, go to Borders and buy some coffee and skip the first half of the book. Put the book back on the shelf and let somebody else buy it. This would take you about an hour.

31 of 38 people found the following review helpful:

5.0 out of 5 stars Outstanding book about investing with ETFs, April 29, 2010

By 

T. Conaghan - See all my reviews
(REAL NAME)   

Amazon Verified Purchase

This review is from: Buy--DON'T Hold: Investing with ETFs Using Relative Strength to Increase Returns with Less Risk (Hardcover)

If you want to invest using ETFs and you are willing to spend a few minutes every week reviewing the conditions of the market and performing a relative strength ranking for 66 ETFs, this book is for you. I have read several other books on investing using ETFs, but none of them are as practical or cover all the key points like this book does. In this book, the author describes in detail a 6 step approach which includes key items such as determining your risk level, assessing the market's condition, ranking the ETFs, and using stops. The book includes specific instructions on how to perform each of these steps using free web sites where you can implement this approach. He has asset allocation recommendations for 4 types of investors based on your risk tolerance. If you no longer believe in the "buy and hold" approach, you owe it to yourself to read this book.