Ancap Agency

Finance Portfolio Research & Analysis for August 4 – 8, 2008

From our USA research division and matching USA strategy analysts, the following financial analysis excerpts are from revisions recently completed on USA based investment portfolios:[1]

SCR Step 1 – Analysis: From No. D2 (USA) Financial Portfolio Research Revision –

[iShares (Wgt: MC)] D.J. U.S. Financial Sector (IYF) vs. [SPDR (Wgt: MC)] S&P 500 (SPY):

(1) Observation – Relative Strength: Results in the relative strength analysis of D.J. U.S. Financial Sector (IYF) versus S&P 500 (SPY) indicate that IYF is neutral to SPY on a relative basis.

(2) Observation – Regression: Comparison of the linear regression to the time-series that has a 3-period forward shift finds the following formation: The linear regression is above the time-series. Since the linear regression provides the “best fit” to the price path, this has positive implications for IYF. While this could indicate a bottom in the financial sector contraction, it is with weak indicators. Thus, we have concerns about the sustainability of this recent price shift for IYF.

(3) Observation – Price Performance: D.J. U.S. Financial Sector (IYF) shows a continuation since late July of a positive / neutral price path (fairly flat slope) on weak indicators.  Whether this development continues or a negative price path resumes will be determined by the actions of the Federal Reserve to any further bank debacles.

[Reference Charts: D2-11 (relative strength); AD2A-11a (regression); AD2B-11b (price)]

First, and furthermore, for most investors, a diversified investment portfolio approach combining stocks, bonds, money market securities, etc., is optimal. While financial diversification cannot protect against a loss from a declining market, it can reduce the overall portfolio’s volatility. With the globalization of information technologies, college education becomes a prerequisite to most careers.  A goal of successful investing thus becomes crucial in providing the upper level education necessary for your child’s future.

Second, in consideration of that goal, studying the information available on this site, which has been kind enough to host our research in this article, will help.

At www.StrategicCapitalResearch.com, we provide additional finance educational materials to what you find here in both investment books and videos. Between the two sites, you should be able to find enough information to get started toward achieving your education investment goals.

Third, to the above analysis excerpt, the usual disclaimers apply. Since all Strategic Capital Research publications provide research that is conducted using historical data, a reminder needs to be made that the analysis of past market reactions cannot predict future market actions. In particular, no amount of historical data can predict the sudden changes that occasionally occur in financial markets.

[1] Reference chart numbers beginning with an “A” refer to the auxiliary analyses completed on the “D” portfolios located at www.strategiccapitalresearch.com/research.html