The 401k Trading System (the System) is a mechanical trading system that uses technical analysis to generate monthly trading signals. The System was created specifically for trading 401(k) accounts; however, it can be traded in any type account. Members of this service receive a monthly email with the new trading signal.

This System is easy to trade. Once per month, just check the signal and adjust your account balance accordingly. That's it!  

About the System
Many 401(k) Plans include only a handful of Funds from which to choose to invest the account balance. For this reason the System rotates between only these four funds:

Money Market Fund Cash
Short-Term Bond Fund Compare to the 1-to-5 Year Corp/Gov Bond Index
Small Company Stock Fund Compare to the Russell 2000 Index
International Stock Fund Compare to the MSCI EAFE Index
 
Most 401(k) plans have similar funds available to trade.  In order to trade this system you need to be able to make monthly changes to your account and have funds similar to the ones listed. Check with your account administrator if you are unsure.  I have included a page which shows how the System would have performed with a variety of publicly traded No-Load Funds.
 
This System was designed for safety.  A close examination of the trade history reveals that the monthly signals favor either the Short-Term Bond Fund or the Money Market Fund about 75% of the time. These two funds are very safe.  The System only rotates into the higher risk International Stock Fund or Small Company Stock Fund when conditions are very favorable for a gain.  The System has 29 wins and only 3 losses while in the two higher risk funds (90.6% win ratio).
 
Although signals are checked monthly, it is common that the account balance may remain in the same fund for several consecutive months. The System averages about 5 trades per year.  For sample trade instructions, see the Signals page.
 
The System generates signals on the second trading day of each month. Signals are sent to members via email by 9:00 AM EST. The order should be placed before the market closes to ensure it will be executed at the day's closing price. To be clear, trades are entered on the second trading day of the month before the market closes.
 
The System was developed through back-testing using data from the year 2000 through 2009. The System went live on June 2, 2010.  All trades since that date have been made with real money in my personal 401(k) Plan account.
Year S&P 500 System
  2012*  15.62%  4.99% 
 2011  2.06%  3.86% 
2010  15.06%  20.15% 
2009  26.46%  17.21% 
2008  -37.00%  21.71% 
2007  5.49%  19.08% 
2006  15.79%  9.78% 
2005  4.91%  13.57% 
2004  10.88%  2.89% 
2003  28.69%  36.67% 
2002  -22.10%  2.93% 
2001  -11.89%  12.22% 
2000  -9.10%  30.17% 
Average  3.45%  15.02% 
* YTD as of 12/31/12
Here is a quick look at some of the System statistics.
 
Since the year 2000, the average compounded annual return is 15.02%.  The current winning trade ratio is 83.61%. 

Notice how the System was able to continue earning very nice returns during years when the market was suffering severe losses.

A complete trade history has been included.
The Equity Chart below compares the non-compounded growth of $10,000 of the System with the S&P 500 tracking stock SPY.  Notice the nice upward trend for the System with very low drawdowns.


The table below shows some of the relevant statistics for the System.

   B-Fund S-Fund  I-Fund  Total 
 Trades  29  16  16  61
 Winning Trades   22  15  14  51
 Losing Trades  7  1  2  10
 % Winners  75.86%  93.75%  87.50%  83.61%
 Largest Win   13.72%  22.09%  12.50%  22.09%
 Largest Loss   -2.06%  -2.56%  -1.04%  -2.56%
B-Fund = Short-Term Bond Fund
S-Fund = Small Company Stock Fund
I-Fund  = International Stock Fund