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Henry Ford's MARKET
SECTOR FUND TIMING STRATEGY: INTRODUCTION: How and why this system came into being. Almost 10 years ago to the day, that I first started writing the Market Sector Fund Timing Strategy for Mutual Funds, with great trepidation, I put in my first order for mutual fund shares. I had been an active, successful trader, with great risk tolerance in the high-roller world of S&P Indexes, who never thought he would find himself entering the "lack-luster" arena of grass-growing mutual funds. How I got there is a short, but relevant story... In April of that year I got a call from my 85 year old Father on the East coast that would change my respect and awe for the power of these markets. I had been trying to coerce my parents to move from the family homestead to California so we would be able to care for them better. My Father had resisted for more than a decade, since his retirement at 72, and persevered; shoveling the snow in the wintertime and mowing the expansive lawn with a push mower while he tended his gardens and greenhouse the rest of the year. That call was to fulfill my wish for them to live with us, but at a cost.... My Mother had been diagnosed with Alzheimers at 83. Now I was not only their caregiver, but the trusted conservator of their hard-earned life savings,. I could not even consider the aggressive market strategies that I used with some modicum of success. I had to ensure that they would always be provided for. I started an intensive but short-lived search for a money-manager, but soon decided I needed to be actively involved in the selection and management of their assets which consisted of a couple of Government bond funds; a few CDs and some stock in an all-but -defunct local Savings & Loan that they had acquired. By August I had mapped out a strategy that I felt would offer good growth, yet safety, and set out to implement a mechanical system that would meet these goals. I had been wary of the recent explosive growth in the market and developed what has now become known as the "Stock Market Crash Index" to safeguard against market downdrafts. No sooner was I fully invested than I got an exit signal on September 28, 1987 that saved us 500 Dow Points. The "PCI" Stock Market Crash Index got us back into the market on December 28 having successfully weathered the equivalent of a 41% stock market decline. I then realized, however that if I was going to be switching market sectors, I had to watch the sectors themselves for exits as opposed to the general market. I set out to develop a sector exit strategy that would work irrespective of the general market. The wisdom of this strategy was most recently evident in 1997, when the broad market surged ahead 20% while the tech sector declined by 30%. It is the same sector timing strategy we will use in conjunction with this system and alerts will be given by both timely announcements on this web site and by email when an exit is due. This system is the culmination of the work that went into helping those assets to grow with maximum risk avoidance. It has gone through numerous improvements, as is natural with any evolutionary process, but the basic tenets have proven themselves again and again. To it's credit, my parents are doing well and enjoying life in Southern California....Dad's 95 and Mom's 93... We should all live so long and so well. Have Funds and Fun Investing.. P.S. This strategy is not named egotistically after me but rather for my Father, the "Original" W. Henry Ford, for whom it was devised and is dedicated....Thanks Dad! Publisher's Note: As this is being completed in March of 1998, we regret the passing of William Henry Ford on January 29, 1998 at the young age of 96. He remained the finest and wisest true Englishman I had ever known, and at his death remembered more than I have forgotten in my lifetime. He will be missed by every life he touched.
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