Winans International’s Real Estate Index (WIREI) ™ (Patent Pending)

Featured in USA Today June 6, 2007

Wall Street has long struggled with how to index and analyze real estate as an investment. In 2005, Winans International tackled the problem by developing a patented approach to rescale and combine several well know studies of U.S. new home prices, since 1830, into a continuous data set without the scaling and “gapping” problems found in other studies.

Applications and Advantages: The WIREI Was Designed For The Following:

1. Historical Comparisons - Long-term “apples to apples” evaluations between the WIREI and major stock and bond indices can be easily done. Since volume studies are also important in market studies, U.S. new home sales are also available since 1963.
2. Index Adjustments - The WIREI has been adjusted for inflation since 1932, changes in new home sizes (i.e., average square feet) since 1973 and has been sub-indexed by four U.S. geographic regions (Northeast, Midwest, South, West) since 1975.
3. Ease in Understanding - Investors find the WIREI easy to follow because it answers basic questions such as: “How much did a house costs when I was born?” and “How much did housing prices decline in the Great Depression?”

Data Used: An index is ultimately only as accurate as the data used. Historically, new home prices have been the most accurate and consistently tracked real estate data set. According to the National Bureau of Economic Research there have been five significant studies done on new home prices since 1830:

1. Census Bureau’s New Home Median and Average Monthly Prices (1963 to present)
2. Bureau of Labor & Statistics’ New Single Family Housing Studies (1937 – 1962)
3. Long Studies (1869 – 1936)
4. Gottlieb Studies (1837 – 1868)
5. Riggleman Studies (1830 - 1836)

(The above data is not seasonally adjusted.)

Data Granularity: The index is calculated yearly 1830-1963 and monthly 1963-present. Data does include preliminary figures but is adjusted when the Census Bureau presents final figures.

Calculations: In order to combine studies with different scales, the WIREI calculations are as follows:

• In order to extend the Census Bureau’s average monthly price from January 1963 through to January 1975, an estimated monthly average price was established by taking the reverse percentage move of the median monthly prices (last month’s price minus present month’s price) divided by present month’s price from January 1963 through December 1974 and calculating the estimated average monthly price through the following formula: ((Last month’s estimated average price multiplied by reverse percentage change of median price from last month to current month) plus last month’s estimated average price).
• Census Bureau’s median and average monthly price calculations are averaged together (January 1963 to present). The prices are adjusted for changes from the preliminary estimates to the final numbers posted 90 days after the month.
• Calculating the reverse yearly percentage changes of the Bureau Labor & Statistics Long, Gottlieb, and Riggleman studies through the following formula: ((Last year’s price minus present year’s price) divided by present year’s price).
• To extend the index past the Census Bureau’s data starting in January, 1963, an estimated yearly average price was established by using the reverse percentage changes of the Riggleman, Gottlieb, Long and Bureau Labor & Statistics’ studies ((Last year’s price minus present year’s price) divided by present year’s price) between December, 1830 through December, 1863 and calculating the estimated average monthly price through the following formula: ((Last year’s estimated average price multiplied by reverse percentage change of the index from last year to current year) plus last year’s estimated average price).

Additional information can be found from U.S. patent application 11670914.

No index should ever be used by itself!

Winans International has one of the largest and best maintained real estate databases with 91 different datasets covering real estate globally including:

• sales by region
• listings by region
• months on the market
• average square footage by region
• median and average prices by region
• conventional and adjustable mortgage rates
• data on real estate investment trust since 1969

There are also 23 indices for real estate markets in foreign countries. Data can be purchased by annual subscription or by single order at www.globalfinancialdata.com.

As of 9/30/07

Index Value	%Chg Last Qtr (Revised)	%Chg Last Qtr (Preliminary)	%Chg YTD	%Chg 12 Month
261,800	-2.5%	-5.1%	-4.2%	-6.0%

Click any Chart for Larger View

WIREI Chart 2006 - 9/30/07

WIREI 1932 - 2006

WIREI 1830 - 2006

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Winans International’s Preferred Stock Index
(WIPSI) ™

Featured in Investor’s Business Daily, 8/22/2007

Preferred stocks have historically been one of the best income investments on Wall Street. Since 1900, preferred stocks overall have annually increased 7.3% versus 5.8% for corporate bonds. The 105-year average annual dividend yield was 6.4%.

This is the first investment index devoted solely to tracking the price and yield of traditional preferred stocks from 1980 to present.

The WIPSI is an even-weighted index that consists of traditional preferred stocks of 30 U.S. companies that have consistently issued listed preferred stocks on the NYSE. As of December 2006, the industry breakdown was 53% utilities, 37% financial services, 7% industrial and 3% business services. The average S&P rating is BBB. Price and yield are posted on a weekly basis. 

Winans International's Preferred Stock Index Current Information as of 08/01/08

Index Value	%Chg 1 Week	%Chg YTD	% Chg 12 Month	Current % Yield
18.74	+2.60%	-8.03%	-19.75%	9.04%

Winans International’s Preferred Stock Index 2006 – 08/01/08 

Winans International’s Preferred Stock Index (with extensions) 1890 – 08/01/08 

For more information on preferred stocks go to www.preferredsthebook.com

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"Preferreds - Wall Street’s Best-Kept Income Secret” by Kenneth G. Winans, President & Founder of Winans International

Amazingly, this is the first book, since the 1930s, devoted to traditional preferred stocks. Although it’s a mystery why this time-tested investment medium largely has been overlooked, the advice in this award-winning book will help readers navigate the world of preferred stocks and other income investments now and in the future.

 

 

Here is what readers had to say:

“I found it to be very informative, well organized, to the point and void of hard to understand clutter.”

—Rod M.

"Good book; clear and concise, which for whatever reason, seems to be a problem for many people who write financial books…probably the best book ever written on the subject.”

— Bill Gibson,
CFA - Director of Research, Nollenberger Capital Partners

“A worthwhile read for investment managers and advisors looking for new ideas to generate returns in their income investing accounts.”

—Mike Carr,
CMT Editor, Technically Speaking Newsletter.

For more information go to www.preferredsthebook.com or www.amazon.com

If you click on one of the links above you will be leaving the Winans International Website.  The link you have selected is located on another server. Please click on the link above to leave the Winans International site and proceed to the selected site. Winans International does not endorse this website, its sponsor, or any of the policies, activities, products, or services offered on the site or by any advertiser on the site.

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Winans Trend Indicator (Patent Pending)

“Ken’s research shows a 40 week moving average works best.”
William Gibson, CFA (author of Mr. Market Newsletter)

Winans Trend Indicator 1999 - 2004

Click image for larger image

Wall Street has long used moving averages. It is one of the few universal tools used to some degree by both fundamentalist and technicians in investment analysis. Although many types of moving averages are used, the 200-day moving average is one of the most common indicators followed by Wall Street and investors alike. In fact, it is listed daily in financial publications such as The Wall Street Journal and Investor's Business Daily and weekly in Barron’s and Business Week magazines. Websites such as www.StockCharts.com post it continuously free of charge.

The Winans Trend Indicator (WTI) is our “keel of the ship” in determining overall investment strategy in stock investing. Based on the analysis of hundreds of years of investment data and over 15-years as an investment manager, it was discovered that a simple moving average (sma) works better for long-term trend analysis. The 200-day moving average was found to be most effective as a selling indicator; while the 125-day moving average was better as a buying indicator. Further studies showed that percentage adjustments used as filters on the 125-sma and the 200-sma significantly improved the indicator’s effectiveness.

Signals:*

Buy –  An index crossing above the 125-day percentage filter on a Friday close.

Sell -   An index crossing below the 200-day percentage filter on a Friday close.

*All positions were entered at the opening the following Monday.

Results: There were 45 signals over 56 years. The following is a summary of the performance of using moving average crossover signals on the WTI versus the S&P 500 Index:

	WTI Crossovers	Buy & Hold The Index	Difference
Cumulative	73,200%	67,400%	5,800%
Year to Year:*
Average	13.7%	13.1%	0.6%
Median	15.4%	15.4%	0%
Maximum	51.1%	51.1%	0%
Minimum	(10.9%)	(25.3%)	13.3%
% Of Time Outperformed	73%
# Negative Yrs <(1%)	10	13	3
# Consecutive Negative Yrs	0	3	3
% Of Time in Stock Market	81%	100%	19%
Average per Decade:
1950’s	19.6%	20.2%	(0.6%)
1960’s	8.8%	8.5%	0.3%
1970’s	10.2%	7.7%	2.5%
1980’s	17.1%	17.8%	(0.7%)
1990’s	17.9%	18.5%	(0.5%)
2000’s	6.0%	2.5%	3.5%

* Reinvestment of dividends and money market interest were not included; commissions were not included; management fees were not included.

Additional information can be found from U.S. patent application 11767880.

Past performance should not be taken as representative of future results. The information supplied and the formula calculations used are considered reliable but cannot be guaranteed. Information supplied can change without notice.

Conclusions: The results clearly demonstrate the following:

1. WTI outperformed the index both cumulatively and annually. In other words, the alpha is positive.
2. Since the moving averages had an investor out of the market 19% of the time, the beta is below 1.
3. WTI outperformed the index annually 73% of the time with a lower amount of losing years and less volatility.
4. There were no two consecutive years in which WTI underperformed the index or posted negative returns.
5. While WTI did slightly lag the index during the bull market decades (50’s, 80’s & 90’s), it outperformed during the “trading range” decades (60’s, 70’s, 2000’s).
6. There were 45 signals over the 56 years (a signal every 9.6 months). However, they varied in frequency (1960 had 4 signals and no signals from 1991-1998.

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Winans Investment Chart

Financial charts paint a historical picture of investing and have been an essential tool, as well as a long-standing wall decoration, in the offices of investment professionals and investors, alike.

Unfortunately, it has been impossible to find a chart that shows a composite of most major types of investment groups throughout U.S. history.  Until now!

As a leading investment management and research firm that has developed two innovative market indices -- The Winans International Preferred Stock Index (WIPSI)™ and the Winans International Real Estate Index (WIREI)™ -- we set out to design a chart that would effectively show the complete U.S. history of major types of investments.

How the Winans Investment Chart Stands Up to the Competition

Investment & Timeframe (year)	Winans	SRC	Ibbotson	Andex
US Common Stocks	1800	1907	1926	1927
US Home Prices	1830	No	No	No
Commodities	1800	No	No	No
US Corporate Bonds	1860	1919	No	No
US Preferred Stocks	1890	No	No	No
10-Year T-Bonds	1800	1919	1926	1927
Average Annual Return Table	1850	No	1926	1927
Inflation Adjusted Returns Table	1900	No	1926	No
Wall Chart Size	18x24	24x36	25x38	24x37
	or
	16x20	(Ideal for a cubical office!)
Price (plus s/h)	$29.95	$89.00	$100.00	$30.00

Research by Investment Analysts for Investment Analysts!

To order NOW call 1-800-310-5389

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