Why PCA Works
This is the basic idea behind PCA
The concept started with the following idea….
Lets say you bought 500 shares of a ten dollar stock, then the price fell steadily down to four, and then it steadily climbed back up to ten.
Well, all I can say is, if you were a buy and hold investor, you were on an emotional roller coaster for sure.
But if you were a PCA user you would be the happiest investor on the street. Why?…
Take a look at the following…
Investor A and Investor B bought the same stock that bounced from $10 to $4 and back.
|
Investor A |
Investor B 1000 Shares
Buy & Hold (Bought 10K in stock and is 100% at risk) |
||
|
Price
|
Value
|
Price
|
Value
|
|
$10
|
$10,000
|
$10
|
$10,000
|
|
$5
|
$7,275
|
$5
|
$5,000
|
|
$4
|
$6,273
|
$4
|
$4,000
|
|
$8
|
$12,240
|
$8
|
$8,000
|
|
$10
|
$14,376
|
$10
|
$10,000
|
|
PCA Profit
44% |
PCA Profit
$4,376 |
Stock Price
0% |
B & H Profit
$0 |
Now both these guys bought and held the same stock for the same period of time, but the PCA user deployed his cash strategically and reaped huge benefits over the buy and holder.
I will show them to you in black and white.
The PCA user is up 44% with a profit of $4,376 while the buy and holder is only even, with nothing to show for all that sweating he did when his portfolio was only worth 4 grand.
The PCA recommended 5 trades 3 Buys & 2 Sells over the time period, and allowed an average of only 67% of our 10K investment to be at risk.
The buy and hold investor was 100% at risk the entire time, I guess he didn’t have a great Risk Management tool like PCA.
Its too bad really, because the return on capital at risk was not a mere 44%, it was a whopping 63.1% and better still, we now own 842 shares at an average cost of only $5.90 Per Share.
So overall we started with …
- Beginning Portfolio Value $10,000 , The same as the buy and hold investor.
But now we have…
- Current Portfolio Value $14,376, way better than the buy and hold investor.
- Current Stock Value $8,415.00 58.5%, hmm what do you know… more than we started with.
- Current Cash Reserve $5,960.00 41.5%, wow! actual clean profit, off the table and safely in the bank!
- 842 Shares Owned @ an average cost of only $5.90 and currently worth $10.00
Imagine that, clean profit in the bank… Boy that feels good.
This looks better all the time.
But if you knew that the more times you compound like that the better it gets, its just like compound interest, only you are actually compounding shares.
Every serious investor that wants a REAL strategy that works should try Position Cost Averaging.
If Investor A got to ride this roller coaster just 2 more times from 10 to 4 and back he would be up to a portfolio value of $27,302!
And all this on a stock that never once went over the ten dollars we paid per share on our initial purchase.
Are you beginning to see the power of Position Cost Averaging?
I thought you would.
Anybody can do this, it is NOT rocket science, just simple mathematics and a great piece of software.
Order Your PCA system today for ONLY $279.00
