We have been managing investments since 2009, and as a fiduciary, we are always working to use all of the latest academic studies and data to obtain the best result for you. We continually seek to make improvements to our investment strategy that will allow for faster response times to various market environments,  thereby reducing your risk and increasing your return. Our goal is to provide you with an investment strategy, that when all the factors are considered, results in the highest probability of long-term success. Our strategy utilizes diversification, the correlation between assets, and human behavior as measured by momentum to achieve that goal. We can employ our strategy across different risk levels, which allows us to tailor the portfolio to your needs.

Backtested Portfolio Results

What is backtesting? 

Backtesting is a key component (but certainly not a perfect one!) of effective portfolio management development. It is accomplished by reconstructing, with historical data, trades that would have occurred in the past using rules defined by a given strategy. The result offers statistics to gauge the effectiveness of the strategy. Therefore, the following results do not represent the results of actual portfolio performance using client assets but were achieved by means of the retroactive application. It is in essence, what would have happened had this strategy been deployed in the past. The performance displayed represents total returns and includes reinvestment of interest and dividends and is net of our 1% annual advisory fee and trading costs, but it does not include taxes. We were not, during the entire period in question, managing money according to the strategy depicted. The results may not reflect the impact that any material market or economic factors might have had on our use of the back-tested model if the model had been used during the period. Historical data and analysis should not be taken as an indication or guarantee of future performance, it’s simply a guide. Past performance is no guarantee of future results and future performance may differ significantly from historical performance. All of the following results were obtained using only publicly traded exchange-traded funds, ETFs. There are limitations in making comparisons to benchmarks, as the benchmarks do not perfectly correspond to the strategy that we use. They are simply given as a reference for what other financial advisors and the general public may use as their investment strategy.  The worst drawdown indicates the worst period of return for the portfolio during the entire backtesting period and while it should serve as a relative guide between the strategies,  drawdowns could be worse in the future. *While the backtests below display how we are investing for today and for the future, our firm’s actual performance from 2009 until now is available upon request. 

Our Strategies:

3x Growth | Growth | Conservative Growth |

Capital Preservation | 401k

All of our strategies utilize the same primary strategy, but there are important differences between them. We work with you to select the best possible strategy, or combination of strategies, given your unique circumstances.

  • Our 3x growth strategy uses our growth strategy but with 3x ETFs, which have 3x the upside and downside of normal ETFs. This significantly increases both the risk and the return.
  • Our more conservative portfolios have a fixed percentage in bonds/cash, which lowers the day to day fluctuation of the portfolio by reducing the risk and return.
  • Retirement accounts that are held with your employer (401k, 403b, etc.) generally have 30 day trading restrictions and limited investment choices, so the performance is therefore lower than the strategies that have no restrictions.
  • The backtest starts in 2003, which is the oldest possible start date given the history of exchange traded funds. The 3x Growth backtest starts in 2010, since most 3x ETFs were not in existence before then. Dual Momentum, which is the main engine that drives our strategy,  has independent backtests going back to 1950 using indexes. Backtests for Momentum in general, go back to the year 1223. Human behavior has proven to be quite consistent throughout long periods of time.
  • The benchmark SPY is 100% in equities. Global allocation moves between 50-70% in stocks and 30-50% in bonds. 60/40 is 60% stocks and 40% bonds. Dual momentum rotates between stocks and bonds entirely depending on market conditions.

As we have mentioned, historical data and analysis should not be taken as an indication or guarantee of future performance. Past performance is no guarantee of future results and future performance may differ significantly from historical performance. The backtests are displayed to give you an idea of how our investment strategy has worked in the past and how it has differed from other investment strategies during that time.

Quantitative backtests have many inherent limitations, some of which, but not all, are described below. One of the limitations of backtested performance results is that they are generally prepared with the benefit of hindsight. In addition, backtested trading does not involve financial risk, and no backtested trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or adhere to a particular trading program in spite of trading losses can adversely affect actual trading results. The backtested performance results contained herein represents the application of the quantitative models as currently in effect, and there can be no assurance that the models or portfolio constituents will remain the same in the future or that an application of the current models in the future will produce similar results because the relevant market and economic conditions that prevailed during the backtested performance period will not necessarily recur. There are numerous other factors related to the markets in general or to the implementation of any specific trading strategy which cannot be fully accounted for in the preparation of backtested performance results, all of which can adversely affect actual trading results. Prudent decisions are often made using history as a guide, but no one knows the future, and therefore the results should not be viewed as an expectation of what will happen in the future, but merely as a tool to better understand how the various strategies and benchmarks differ.