> To get into Help, Press F1, or Alt H, or click on a Help box with your left mouse button. The help in Econ is context-sensitive, so you will see a help screen about the section of the program you are in. You can press F1 from any screen. You may scroll up and down this text or you may select the Sections button to find a relevent section for the help you need. Move to the chapter you want to see and press Enter or double click the left mouse button. You sometimes see an Exit button on the bottom portion of some screens. You may click on these buttons with the mouse or you may hit the Esc key to exit those screens. To print the entire help file out, quit to DOS and type "copy helpfile.txt prn". There is also a manual stored as econ.txt. You can print it by typing "copy econ.txt prn" at a DOS prompt. <> Read this user agreement before using the software. By using the software, you agree to be bound by the terms of this license. Econ is copyrighted software of DC Econometrics, and all rights are reserved. You are authorized to make backup copies, give away copies, and post it to public bulletin board systems. You may not distribute copies of the output forecasts without written permission from DC Econometrics. You agree that the liability of DC Econometrics, its affiliates, agents, and licensors, if any, arising out of any kind of legal claim (whether in contract, tort, or otherwise) in any way connected with this software shall not exceed the amount you paid to DC Econometrics for the software and documentation. <> The main menu is a Pull-Down type of display. You can access your selection in a number of ways. If you have a Mouse, just click with the LEFT Mouse button on the item you want to select. You may also use the Arrow Keys to select a Menu item. After you make your selection, hit the ENTER Key to execute your choice. A third method is to hold down the ALT Key and type the Highlighted letter of your selection. <> This gives you 4 choices in a sub-menu: Add New data Edit Data Adjust File to New Baseline Make ASCII Data File Please choose one of the four. <> Once a month you need to add new data. I enter the numbers from the first Friday of the month. All 9 numbers you need are published in Barron's every week in the Market Laboratory section. Type in a number and press Enter. If you press Enter while 0.00 is displayed, the value from last month will be used. This can be useful for Prime Rate which rarely changes. When you are done entering numbers, click OK to store the new numbers in the database. Or click Cancel to exit without updating the database. <> The screen display is a scrolling list of data starting with January 1965. It is arranged with the most current data at the top of the list. To ADD an item to the data list, you may Mouse Click on the Add Record Button, or hold down the Alt Key and hit the 'A' key. To Change an item you must first select the item you wish to change. You can use the up and down arrow keys to scroll up & down, or the Pg Up or Pg Dn keys, or hold down the Ctrl key while hitting the Pd Up or Pg Dn keys to quickly move to the top or bottom of the list. You can scroll up and down by using the mouse. You can use the elevator box to the right of the screen, you can place the mouse on the lower or upper portion of the scrolling table and depress the RIGHT mouse button to scroll. Once you have selected the item to change you may either double click on it with the mouse, click on the Change Button, or hold down the Alt key and hit the 'C' key. Type in the new number. If you enter zero, the prior month's number will be used. This is done to prevent crazy entries like zero for S&P 500, an obvious mistake which will ruin the forecasts. Print asks you to enter a start number and an end number. A list of monthly data will be sent to your printer. Exit will return you to the main menu. <> You have selected a month to change and you have selected Change. Now you see a list of the numbers for that month. Move to the number you want to change and type in what you want. If you enter zero, the prior month's number will be used. Then select OK to accept the changes, or Cancel to get out without changing the data file. <> Select which index you want to adjust, the S&P 500 Index or the Consumer Price Index. This procedure allows you to make adjustments to all numbers in a data file to a new baseline. It should be used to correct for possible changes in the way data is reported. If the S&P 500 Index is changed by a factor of 10 or is discontinued and you need to use another stock index, this routine will adjust the old numbers to match the new. CPI was adjusted by the Dept. of Commerce to make 1982-1984 = 100. 1967 had been the base year. If such a change ever happens again, this routine allows you to enter a number from the old index and an equivalent number from the new index to adjust all the old data to the new baseline. <> In this procedure you will actually enter an old value and a new value. These will form a factor to be applied to ALL of the values in the selected data file. Choose your values carefully. In the event you wish to return to your original data just reverse the process. Enter the former new value as the old index and the original number as the new index. <> This writes the monthy data to an ASCII file. DATAFILE.DAT is the name of the file created. You can import this ascii file to Lotus 123 or other spreadsheets to plot or manipulate the data. This allows you easy access to many years of past monthly history. <> There are 3 choices in the Forecast sub-menu: Current Forecast Historical Forecast What-If Forecast Please choose one of these three. <> Current data will be used to compute a forecast for S&P 500, 30 year Treasury bond interest rates, 90 day Treasury Bill interest rates, Gold prices, and the CPI inflation rate. All are forecasted 3, 6, and 12 months ahead. From these forecasts, asset allocations will be calculated for Mimimum Risk, Conservative, Aggressive, and Maximum Return portfolios. Asset Allocation uses the forecasted returns for 3, 6, and 12 months ahead. They are averaged together on an annualized basis. Dividends and coupon yields are added in to estimate a return for each asset. The standard deviations displayed are based on past history of the market's deviations from the model's forecasts. The Asset Allocation page of the forecasts has about a 6 month time horizon because we averaged the 3, 6, and 12 month forecasts together. The Minimum Risk portfolio is always 100% T Bills. The Conservative portfolio has a standard deviation of 4.0% or less. The Aggressive portfolio has a standard deviation of 7.5% per year. The Maximum Return portfolio does not care about risk, and aims for the best possible return given the restrictions from Asset Allocation setups. Standard deviation can be thought of as the average error of the forecasts. It is reported based on the past history 1963 to 1993. For all you statistical perfectionists out there, standard deviation is really the root mean square error. The average error is more precisely calculated as 0.80 times the standard deviation assuming a normal distribution. <> This is the same as the current forecast, but you can display the forecast for any prior month and year, as far back as the data allow. The equations used are the same as the ones used to compute today's forecasts. This allows you to check the fit of the equations to past history. <> Enter the numbers you want and select OK. Then you will see them listed. Select Print Forecast to see the results on screen. The numbers are not stored in the database, so you can enter weird numbers if you want to. Press Enter while 0.00 is displayed to re-use last month's number. If there is a change in interest rates, or a big move in the stock market, you may wish to get a new forecast before it is time to store new data. The What-If routine allows you to get a forecast for new numbers without storing them. Some users run a What-If forecast every week to stay on top of things. Or you can enter imaginary data to see what the effect would be if the Fed raises interest rates, or if inflation turns out higher than expected. <> The numbers you have entered are shown above. To see the forecast based on them, click on the Print Forecast square at lower right. To add another month of numbers, click on Add Record. To change the numbers above, click on Change. Click Exit to leave for the main menu immediately without seeing the What-If forecast. <> XY plots can be produced. You have five choices: 1. Data vs time 2. Actual vs Predicted 3. Predicted and Actual vs time 4. One Variable vs Another 5. Past Trading History Please choose one of the five. After you make your selection, the data will be set up for plotting. This takes a while, especially on older machines. <<1. Data vs Time>> You can plot any of the 9 monthly data files by date. The last 5 years are shown. Select one to plot with the mouse, or arrow keys and Enter. Then select Plot to see the graph. If you want to print the graph, use the Print Screen key on your keyboard. <<2. Actual vs. Predicted>> You select a type of forecast and a Variable, for example, 6 months ahead, T Bond rates. Then select Plot. This plots the last 5 years of predicted changes against actual changes. A correlation coefficient is calculated and displayed. The changes are plotted in percent. A +10% change in the S&P 500 could be from 400 to 440. A -10% change in T Bill rate could be from 5.0% to 4.5% yield, for example. This allows you to see how accurate the program has been over the last 5 years. The correlations for the last 5 years may differ from the correlations for the 30 years used to create the models which are quoted in the manual. The best possible plot would be a 45 degree line where forecasted changes equal actual changes. Typically most points should lie in the upper right and lower left quadrants. This shows that predicted gains were confirmed by actual gains, and predicted declines led to actual drops. <<3. Predicted and Actual vs Time>> First select the forecast time period: 3, 6, or 12 months ahead. Then select the Variable to graph, S&P 500 for example. Then select Plot to see the graph. The last 5 years are plotted. <<4. One Variable vs Another>> Select a variable for the x axis (horizontal). Select a variable for the y axis (vertical). Then select Plot to see the graph. Each point on the graph is a pair of numbers from a past month. The last 5 years are shown. <<5. Past Trading History>> This will show you how well the forecasts have done in the past. The program predicts each asset, then picks the one it thinks will have the highest return, and holds it 6 months. It checks to see what the result actually was and reports that return as its yield. The results are listed in a table, including the value of a hypothetical portfolio. The record from January 1971 to January 1994 is impressive. $100 grew to $206,385. This is a compound annual growth rate of over 39% per year! It was achieved by putting all eggs in one basket, probably a riskier strategy than you will want. The volatile assets, gold and zero coupon bonds, are used heavily. There are 7 losses in the 46 six-month periods. Sometimes you will see a small gain reported at the end of the list which has not yet happened. This is the projected gain in six months if nothing changes. It is the bond coupon yield or the stock dividend yield. To implement the trading shown here for yourself, go into setups and raise all asset allocation limits to 100%. Then the maximum return portfolio will be the same as in the past trading history simulation. <> There are four choices: Asset Allocation Setup Opening Screen Setup Famous Sayings Printer Setup Please choose one of these four. <> This allows you to set up the maximum % allocations for your portfolios. Whatever you enter in will be used by the program to determine your asset allocation limits. If you wish to restore the program's default values, select Restore Default Values at the bottom of the screen. Gold and zero coupon bonds are risky. They fluctuate in price more than the S&P 500, T Bonds, or T Bills. That is why the default limits are 10% maximum for gold and 50% maximum for zero coupon bonds. The other assets are allowed to reach 100% allocations. <> Select Yes or No to turn the opening screen on or off. Experienced users often turn this screen off to save a keystroke each time the program is run. <> Scroll up and down to select a saying using the right mouse button, arrow keys, page up or page down keys. Select change to edit a saying. Deletion is not allowed, but you can change one you don't like to one you do. Select Insert to add a new saying. Print will dump the entire list to the printer. Exit or escape returns you to the main menu. <> You will see a list of printer choices. LPT1 is the most common printer and it is our default choice. You may also choose another LPT, or COM device, or send output to a file. You printer will probably work fine. If not: It is impossible to tell exactly what type of printer you may have. Lines per page typically vary from 59 to 66. Most printers use the ascii character with a decimal value of 12 for a form feed. 13 is a carriage return, and 10 is a line feed. These are the defaults we have assumed. If your printer is ancient or weird, you can change these values by editing the PRINTER.CTL file. Make a backup copy of the PRINTER.CTL file called PRINTER.BAK so you don't lose everything. Type: copy printer.ctl printer.bak Now edit PRINTER.CTL. You will see: PRINTERS 1 GENERIC PRINTER PORTS CONTROLS 1 CARRIAGE RETURN 2 FORMFEED 3 LINEFEED SEQUENCES 1 1 '<13>' 1 2 '<12>' (change this one if needed) 1 3 '<10>' You can change the 12 above to whatever your form feed character is (see your printer manual). Most users will never have to change this file. <> Please register your copy of Econ. Just select Registration from the main menu and fill in the blanks from your keyboard. Then Print the form. You will receive a printed manual describing this program and all of its features. You will also receive our most current version of the software. In addition, you will receive a current set of data files containing all of the latest monthly data entries. If we write a new version of Econ, we will mail information about the new program to all registered users. Econ is shareware, not freeware. It is distributed via bulletin boards, catalogs, and rack vendors. It is made available by them on a try-before-you-buy basis. If you are using the program regularly, you are expected to register it. The author receives no money until you register. Shareware catalogs and rack vendors do not pay royalties to authors. If you ordered this program directly from DC Econometrics and paid $49.95, you are already registered. <> You can choose to quit by selecting Quit with your mouse, or with arrow keys and Enter, or with Alt Q. It will ask "OK to Quit? Alt+K". Press Enter or click the question with your left mouse key and you will exit the program and go to DOS. Alt K will also quit. <> To View a report on the screen you may use the up and down arrow keys to scroll up and down, or you can place the mouse in the lower half of the screen and click the right mouse button to scroll down or place the mouse in the upper half of the screen to scroll up. The page up and page down keys work too.