Martin Pring – The Investor’s Guide to Active Asset Allocation (Sector Rotation)

Jul 2, 2007: 8:03 AM CST

Martin Pring’s recent (2006) book The Investor’s Guide to Active Asset Allocation details one of the most complete explanations I have seen so far (in easy to understand format) regarding sector rotation, the business cycle, stock market cycle, money/portfolio management, intermarket relationships and many other concepts. Not only is the text a virtual reference manual for these concepts, Pring provides specific easy to follow strategies for proper asset allocation and targeted diversification to maximize returns using Exchange Traded Funds and other vehicles.

In the book, Pring details his proprietary Six Stages of the Business Cycle and how to identify them (hint: It deals with bonds, commodities, and the S&P 500). He further describes his new research including detailed charts of how certain sectors/industries have performed during each of the six specific stages he outlines and provides strategies to take advantage of specific strength and weakness of under- or over-performing sectors at key times.

It’s not enough to recognize what has happened in the past, but to recognize conditions/relationships occuring now, as well as position long-term portfolios to take advantage of these developments. Swing traders can also benefit by active trading of larger key themes with individual stocks or broader ETFs.

The following bulleted points are from the official description at Amazon.com:

The Investor’s Guide to Active Asset Allocation provides you with proven investing expertise on:

 

  • Basic Principles of Money Management
  • How the Business Cycle Drives the Prices of Bonds, Stocks, and Commodities
  • The Pring Six Business Cycle Stages
  • Technical Tools that Help to Identify Trend Reversals
  • Putting Things into a Long-Term Perspective
  • Recognizing Stages Using Easy-to-Follow Indicators as well as Models
  • How the Ten Market Sectors Fit into the Rotation Process
  • How Individual Sectors and Groups Performed in Each of the Six Stages
  • Asset Allocation for Specific Stages
  • I highly recommend any trader/investor to read Pring’s work to learn sector rotation or economic/business cycles at a deeper level that provides actionable strategies for profit. Martin Pring is recognized as one of the Masters of Technical Analysis, and is often referenced as “The Technician’s Technician.” I have heard Pring speak at two conferences and enjoyed the material and his depth of knowledge regarding the topics discussed.

    Pring wrote an earlier guide in 1996 entitled The All-Season Investor: Successful Strategies for Every Stage in the Business Cycle which details these concepts. I have not read this work yet, but wanted to highlight it as well as one of Pring’s reference guides.

    4 Comments

    4 Responses to “Martin Pring – The Investor’s Guide to Active Asset Allocation (Sector Rotation)”

    1. JMOT Says:

      Great review! I have been looking for a book on sector rotation. Will get my hands on a copy.

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