Great Moments in Fabian History 5/26/10

To give you a bit more perspective on the Fabian Plan and just how effective it’s been throughout the years, I wanted to show you something we call “Great Moments in Fabian History.” This is a rundown of some of the major events that have unfolded in the financial markets during the past three decades, along with some of the specific advice that served our subscribers exceedingly well.

September 1976: Dick Fabian self-publishes the book, “How To Be Your Own Investment Counselor.” This was the first (and in my opinion, still the best) primer on the trend-following approach that formed the basis for the current Fabian Plan. After experiencing the devastating bear market of 1973-74, Dick knew investors needed a better way to manage their serious money. Dick demonstrated that with a simple, easy-to-understand plan for beating the markets, investors really could build serious wealth with only minimal time and effort expended on their investments.

April 1977: Motivated by the overwhelmingly positive response to his book, Dick teamed up with his wife Marie Fabian to launch the Telephone Switch Newsletter right from their dining room table. The basic purpose of the newsletter was to report and to monitor the results of the buy and sell signals generated by the plan laid out in his book. In his original newsletter, Dick included funds such as Fidelity Magellan and 44 Wall Street. He reported on the prices of these funds and the major market indices for the previous 39 weeks. He also produced charts of these indices by hand.

September 1979: Doug Fabian joined the newsletter as a mutual fund analyst.

July 1981: The Telephone Switch Newsletter issued a bear-market sell signal. The sell followed subscriber profits of 40% during the preceding 14-month buy cycle. The bear market that followed registered a drop of 27% in the Dow Industrials. This plunge was the first bear market that Fabian subscribers would avoid. At that time, money funds were paying a whopping 18% annually — accompanied by a nationwide inflation rate of 20%.

September 1982: Dick issued a new bull market buy call that generated returns of 45% in the next 15 months.

June 1985: A buy signal was issued for the newly created International Plan. This buy signal lasted more than two years and produced gains in excess of 140% in international funds. At that time, the U.S. dollar was in a major bear market that provided a strong tailwind to international investments. This uptrend in international markets ended with the 1987 stock market crash.

October 1987: A sell signal on Oct. 15 warned subscribers to move into the safety of the money funds. Four days later, the market experienced its biggest, single-day decline ever. Fabian followers walked away with gains of 23% in calendar year 1987. The Telephone Switch Newsletter was one of five publications to have predicted the decline, according to news reports of The Wall Street Journal. Of course, we did not predict anything. We simply stuck to our disciplined investment approach and followed the rules of the Fabian Plan.

August 1990: The Fabian Plan issued a new sell signal, as Kuwait was invaded by neighboring Iraq. This geopolitical event instigated a global stock market bear that would end only after an American-led coalition of 80 countries booted Saddam Hussein out of Kuwait. We were only out of the market for three months before issuing a new buy signal that led to a 34% gain during the next 18 months.

January 1995: After a year in which the Federal Reserve raised interest rates four times and when most economists were predicting a recession, the Fabian Plan identified a new uptrend that kicked off a bull market run in the late 1990s. During the next five years, the Fabian Plan produced annual gains of more than 20%, led by the technology stock boom and the proliferation of more than 10,000 mutual funds.

April 2000: The Fabian Plan issued a new sell signal for stocks as the NASDAQ market began to fall. A decline of more then 70% ensued during the next three years.

January 4, 2008: The Fabian Plan issued a new sell signal for stocks well before the bear market selling of 2008 intensified. This call put subscribers into the safety and security of the money market. While most investors tossed and turned at night, subscribers to this service slept like babies.

I could go on and on here, but I think I’ve made our point. You see, the Fabian Plan isn’t some here-today, gone-tomorrow gimmick. The Fabian Plan has worked for longer than many stock brokers out there have been alive. And, with a strong adherence to tradition and a constant attempt to learn from the past, we’re going to continue making great calls for you for another three decades.