Hays Advisory Asset Allocation Model Back-test

At Hays Advisory, we believe the direction of the stock market can be determined by examining four factors - Investor Psychology, Monetary Conditions, Market Valuation and Market Trend.  Within these four major components, we track hundreds of indicators, each ranked based upon their historical effectiveness and correlation to past market performance.  We score each indicator daily or weekly, and then weight and add these scores to determine a current rating.  The final step is to examine the historical returns of the stock market when we have seen similar conditions in the past.  While history does not always repeat, it does often rhyme.  By reviewing market history, we hope to dramatically improve our odds of predicting the stock market's future direction.

Over the last several years, we have added significantly to this process and made major improvements to our model's four main components of Investor Psychology, Monetary Conditions, Market Valuation and Market trend that drive our stock market outlook and commentary.  We recently completed a back-test of this upgraded strategy from 1970 - 2009, and we are extremely excited about the results. 


Jeff Hays

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