How to Read the Trade Alerts
In a typical month, you should receive one or two Trade Alerts by email. They are usually sent over a weekend. When you receive a Trade Alert, you know that at least one of the two Model Portfolios has recommended some kind of change. You should take a look at it to determine if your Model Portfolio is affected.
How to Access a Trade Alert
In the email you receive, there will be a direct web link to the Trade Alert. All you have to do is click on the link in your email and enter your secure login ID and password. This will take you directly to the Trade Alert.
You can also access each Trade Alert from our home page at www.ConfidentStrategies.com. First you will need to login through the secure members login button and enter your login information. This will take you into your account and you will be able to see any recently posted Trade Alerts and access them.
The "Introduction"
The introduction is intended to provide you with a brief overview of the recommended change so you can quickly determine whether your Model Portfolio is affected, what the change involves and why it is being made.
Within the introduction you will see a box. If the box says “No Change” for your Model Portfolio then you need to do nothing. If a change is recommended for your portfolio, then it will briefly say what the change is. It will typically say “Sell” something and “Buy” something else. Usually the changes involve selling one investment and investing the proceeds in something else.
Of course, it is your own decision whether to accept or reject any recommendation.
The "Recommended Portfolio Allocations" Section
Just below the introduction is the Recommended Portfolio Allocations section. Here you will find a box for each Model Portfolio. Here we show you what the new, recommended allocation is for each Model Portfolio after giving effect to the recommended changes. So, these allocations represent the new, updated percentages.
The "Model Portfolio Details" Section
Once you have determined that there is a recommended change for your Model Portfolio, you can access the investment details in the Model Portfolio Details section.
Here we show you two different tables for each Model Portfolio:
- "Recommended Changes for This Week"
- "Current Recommended Portfolio Allocations"
These two tables repeat the recommended changes and the resulting, new allocations … but with additional detail.
First, the tables are organized in three columns representing each of the three different recommended sources for our investment fund options—the Rydex Funds family, the ProFunds family and also the exchange traded funds (ETFs) alternative.
[If you don’t yet understand why we recommend that you access our recommended investment fund options through either Rydex Funds, ProFunds or exchange traded funds (ETFs), then you should read What Brokers Do You Recommend?]
Secondly, the “Recommended Changes” table shows the particular fund types that are being bought and sold. It also shows you the percentage of the portfolio that each traded investment represents in the transaction. NOTE THAT THE PERCENTAGES IN THIS TABLE WILL RARELY ADD UP TO 100%.
Thirdly, the “Recommended Changes” table shows the ticker symbol of each recommended investment type. (Ticker symbols are a unique identifier attached to every individual stock and mutual fund. It can be very helpful to know the ticker symbol of an investment when you talk to your broker or deal with an online brokerage system.) Each column on the table will have a different set of ticker symbols because, for example, the ticker symbol for a Small Cap fund at Rydex is RYAZX and at ProFunds it is SLPIX.
The next table displays the “Current Recommended Portfolio Allocations”. These are the new allocations for the Model Portfolio. They represent the total portfolio and how its allocations should look once you have implemented the recommended changes. NOTE THAT THE ALLOCATION PERCENTAGES WILL ALWAYS ADD UP TO 100%.
Implement the Recommended Changes
Of course, it is your choice whether to follow the recommendations. But we suggest that you try to make the recommended changes in your own account within a few days of receiving a Trade Alert. There are two reasons for this: First, you will dilute the risk management and profit maximizing features provided by the models’ technical logic if you wait very long to implement a change. However, we have found that for the vast majority of the recommended changes, your actual investment performance will not be significantly impacted by a few days of delay, nor in many cases by a week or two delay. So, you needn’t make yourself crazy.
- However, you should also recognize that there will be isolated instances where the timing of a particular sale or purchase could be very important. This will be true more often when a Model Portfolio is making a change to reduce exposure to the stock market because it is dropping sharply.
So if you intend to follow one of the Model Portfolios, you should do your best to look for the Trade Alerts and make the changes right away. If you happen to miss one while away on a trip, just make the change when you get home and don’t worry about it.
- “Exchange” Rather than Buy and Sell Separately: Most of the recommendations you receive by Trade Alert will involve selling one mutual fund and investing the proceeds in a different mutual fund. Make sure you examine your broker’s online transaction system to see if they offer the ability to make such a trade by “exchange”. If they do, then you can avoid the normal period of time required for the “sale” transaction to clear before you can execute the “buy”. Using the exchange feature is a significant convenience and is one reason you should consider holding your account directly with either ProFunds or Rydex Investments. They both offer the exchange feature and make it easy for you to handle your mutual fund transactions effortlessly and without any cost.
