What are the risks with your stock market & mutual funds investment strategies?
... whether you want to manage a portfolio of ETFs, Index Funds or Mutual Funds
We have engineered each of our investment strategies (with the notable exception of the
Max Xtender Model) to reduce the level of volatility normally experienced by a “buy and hold” investor ... and to produce a strong
Risk-Adjusted Return. However, you should consider the following risk factors before making a decision:
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Historical performance is not a guarantee of future performance. The statistical relationships underlying the decision-making logic of the investment models are based upon historical patterns of market behavior. A change in these patterns could affect future performance.
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Some of our strategies' trackrecord is based upon computer simulation .While the process of simulating a trading program through time, know as “back testing”, is now well established, the result of this kind of validation cannot be viewed to be as credible as actual, “live” results. As a result, the historical performance histories shown on this site should be understood to be “hypothetical” rather than actual.
- The investment models’ logic will not protect your portfolio from an overnight market “meltdown”. The logic in our investment models is good at detecting the kind of gradual deterioration of the internal condition and health of the stock market that has historically led to bear markets. Even the “crash” of October 1987 fell into the category of a normal bear market and would have been recognized in advance by our logic. However, the potential risk of a negative, external shock (e.g., terrorism or natural disaster) that impacts confidence in the financial markets overnight, cannot be predicted by the market timing based logic of these models. If such an event triggered an immediate and huge drop in the markets, your portfolio could experience higher volatility than expected by the historical experience of our models.
- The use of our strategies may not be suitable for you. We do not provide individualized investment advice. The suitability of an individual investment or stock market investing strategy for a particular person is a function of numerous individual factors, some of which may be unique to the individual investor. It is your sole responsibility to determine the suitability of our strategies and stock recommendations for your own portfolio. You also bear responsibility for your own investment research and decisions. We therefore urge you to consult with a qualified investment advisor before making an investment. In addition, you may consult Which Strategy is Best for Me? for more detailed information about our strategies to assist you and a financial advisor in the determination of suitability.
- Annual performance gains will be largely subject to short term capital gains taxes: All of our strategies generate most of their annual return in the form of short term capital gains. This is due to the transaction frequency required to execute the dynamic asset allocation approach. This is an inefficiency compared with a buy and hold strategy.
- However, we believe that the higher returns and lower volatility provided by our strategies should produce a much higher risk-adjusted return, after tax, in the long run.
