Recognizing Quality when it matters?

“Only buy a stock if it goes up; if it doesn’t go up, don’t buy it”… advice from Will Rogers. Widely known in the 20’s and 30’s, Rogers was a cowboy, humorist, vaudeville performer, social commentator, actor, with the perfect solution to investing without risk. One minor problem… it’s a fantasy!

Avoiding risk seems to be in our DNA and that’s not necessarily a bad thing; it’s just impractical. There’s an element of risk in everything we do. However the degree of risk people are willing to take generally varies based on age, responsibilities, expectations, job security, health and needs.

How many times has it been said that retail investors stayed on the sidelines since the ’08 market decline? It’s been repeated so often we don’t even pay attention because we already know why–fear, too risky, etc.

But what about those who were not in the market during the last crash? Don’t they take the same risk as any investor? Of course, but the last few years with the Fed induced bull market, no corrections of any size, new investors have not been introduced to the panic that more seasoned investors have experienced.

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In fact in the last few years, as a result of the Fed intervention, a new phenomenon has come to life on the Internet. Some have called them robo-advisors or auto-advisors. The focus is on keeping costs down, no or low account minimums, and–drum roll–“rebalancing” when it hits the fan. My personal favorite is the technique called “Tax-loss harvesting”. The idea is to convince you that when your investment is sold at a loss, it’s actually a good thing because should you have a gain, it can offset the tax consequence with the losses. Pardon me but that is such a crap! That entire notion assumes the time frames are the same–either both long or both short term–and the gain is greater than the loss. This also assumes that you can be convinced it’s a sound strategy. More likely it’s a way of massaging losses because what they are doing will never stand the test of time and market cycles. While robo-advisors can argue that chapter is yet to be written, history tells us this is a repackaging of old gimmicky systems.

BuySelliQ has a different, albeit controversial according to some, approach to investing. First, our company is all for keeping costs low. That’s a no brainer unless you work on commissions or sell annuities or load, high-fee mutual funds. BuySelliQ also knows there is no substitute for stepping aside when the market hits the skids. Rebalancing is not going to keep your money safe when the market is in complete free-fall. Some of you may ask, “But then how do you know when to get back in?” Keep reading.

BuySelliQ started with Green & Red dots that provide the buy and sell signals. When users worried about buying too late into the trend, we responded with “New Greens and New Reds” to inform users when a stock or ETF has just changed the dot color from, red to green, and vice versa. The next requests were, “But there are so many of them and we don’t know which to buy” and “Is there any way to know if some are better prospects than others?” This has brought us to our newest feature we like to call Quality Score which as the name implies, ranks the stocks and ETFs in an effort to give you an edge when selecting what to put on your list and where to invest. Before I explain Quality Score further, it’s imperative to state that to be successful, under no circumstance should you ever fail to trust our primary indictor, which is the dot!

The concept is simple. Stocks and ETFs will rank from 0 to 5. The zero (0) occurs when:

  1. The symbol does not meet any of the requirements (technical indicators) or
  2. 5 grey boxes say “DON’T BUY” but in the 2nd example you might already own the symbol and should not sell.

The rules NEVER change. But in the 2nd example, the message is that it’s not the time to buy new or more shares.

From there it’s very simple — the symbol will have one green box, and can progress to 4 green boxes. To get to the fifth green box, the symbol will have gone through more rigorous “quality” tests. Five green boxes merits your attention.

BuySelliQ has a database of over 40,000 symbols and minimizes the time and work required for successful investing. Unlike the “rebalance” story that is all the rage again, (it’s the old “stay invested” nonsense with a new wrapper), what BuySelliQ does has been time tested, market cycle tested and we don’t attempt to “whitewash” losses with “tax-loss” harvesting and neither should you!!

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