ETFOptimize Insights

Data-driven Analysis of the Critical Market Indicators
For Premium Strategy Subscribers and Professional Clients ONLY


ETFOptimize Insights
Note: Our articles cannot cover all offsetting aspects of each model, nor can they provide the spectrum of aggressive/conservative differences between each model. Clients should always follow their model's published systematic decisions to the letter. Doing otherwise negates all the advantages of a systematic, ETFOptimize Premium Strategy. Copyright © 1998–2022, Optimized Investments, Inc., dba Contact us for reprint permission.



Waterfall Selloff Ahead

Part 2: These Approaches Outperform...

Note: Our articles do not cover all offsetting aspects of each model, they can only sample a few of the factors from the spectrum of variables that provide diversification between each of our Premium Strategies. Clients should always follow their chosen model's published systematic decisions to the letter if you seek to replicate its performance. Doing otherwise negates all the advantages of a systematic, ETFOptimize Premium Strategy.
Copyright © 1998–2022, Optimized Investments, Inc., dba Contact us for reprint permission.


This article follows up on Part 1 of this two-part series (published on Sunday), and will review the primary forces currently imposing the most significant influence to the price of stocks and bonds, supported by data and charts.



ETFOptimize Holdings Produce Profits

Each of our current six ETFOptimize Premium Strategies have successfully outperformed the market this year. Also, each of the current ETFs held by our models remain in long-term uptrends. In our Ultimate 6-Model Combo Strategy, those seven positions consist of 33% in a cash-proxy ETF, 11% in an inverse ETF, and the remaining five positions are each invested in commodity-based ETFs in the energy and agriculture sectors.

Investors are experiencing a market environment in which Tesla is down -35%, Facebook/Meta lost -50%, Amazon dropped -42%, the Ark Innovation ETF (ARKK) lost -73% from its 2020 high, the Retail ETF (XRT) fell -39%, the Nasdaq 100 (QQQ) has lost -29%, and even the 20-Year US Treasury Bond (TLT) las lost one-third (-35%) of its value since its 2020 high in the depths of the Covid Crash. With stocks and bonds in this dire situation, we're pleased to be able to say that our models have outperformed the market (S&P 500) this year, and all our positions are in profitable uptrends.

If you are currently a subscriber reviewing the charts of the seven ETFs currently held by our ULTIMATE 6-Model Combo Strategy (or if you're any other longer-term investor, for that matter), we recommend that you review weekly charts of the last 12 months or more when you examine ETF charts. (Note: The average hold time for our models is 4.14 months).

Short-term traders need daily or intraday charts, but longer-term investors should review weekly charts to eliminate the random noise that dominates daily price charts. Weekly charts allow you to view the trend of each Friday's closing prices – a better reflection of the decisions of more discerning institutional and professional investors (many of whom close trades late each Friday to avoid headline risk over the weekend). Viewing a year or more of data will allow you to see the overall, long-term trend, whether upward, downward, or sideways.

To provide an example of the sort of charts we're recommending for a quick, rule-of-thumb determination of the long-term trend of an ETF, stock, or bond, three examples from our ULTIMATE 6-Model Combo Strategy are displayed below. These charts show 1.5 years of weekly prices accompanied by each ETF's 10 or 20-week moving average (dashed-blue line).

A quick glance at a 12 or 18-month weekly chart can tell you if an ETF is in a long-term uptrend. If the 20-week (100-day) trendline (dashed-blue line) is rising, and the ETF is above that trendline, then you can generally assume that ETF is in a long-term uptrend.

Chart 1 below shows an 18-month, weekly chart of our position in the Invesco DB Agriculture Fund (DBA), an ETF that we purchased at the end of January, gaining about 13% to date and 3.09% when this chart was captured on Monday morning alone.

Chart 1: We purchased the Invesco DB Agriculture Fund (DBA) at the end of January, and it remains in a long-term uptrend.


DBA provides us with the type of steadily gaining ETF, featuring low volatility and few surprises, that our quantitative strategies seek to identify. The only surprise is the pleasant upside version when we looked at this chart today.

Chart 2 below shows another example of a consistently climbing, commodity-based ETF, this one the Invesco Optimum Diversified Commodity ETF (PDBC), which we purchased on March 14, 2022. PDBC has gained about 11.40% since we purchased it about eight weeks ago, on March 14, with 1.24% added this morning. We also owned PDBC for several months in 2021 (not shown below), also for an excellent profit.


Chart 2: Our Equity/Defensive (4 ETF) Strategy bought the Invesco Optimum Diversified Commodity ETF (PDBC) on March 14, 2022.


Chart 3 below shows an ETF in our 6-Model Ultimate Strategy (sourced from our Adaptive Equity+ Strategy) that has recorded a short-term loss of about -11%. We purchased the SPDR Oil and Gas Equipment & Services ETF (XES) a few weeks ago on April 18, and it immediately started a decline to its long-term (20-week) moving average.

XES remains above its 20-week trendline, and that trendline is climbing higher, defining XES to be in a long-term uptrend, according to our rule-of-thumb discussed above. On Monday morning (May 16), XES has already climbed 4.29% for the week, and since it's in the oil-services industry, its sector and industry are also in bullish trends.

While XES is not strictly a commodity ETF, it tracks the equities of companies that make equipment and provide services to the hottest investment segment of 2022. The oil and gas industry has been on fire since the Russian invasion of Ukraine, a result of worldwide shortages that are likely to get even tighter if Europe bans Russian fuel products as expected.


Chart 3: Our Adaptive Equity+ (2 ETF) Strategy has experienced a temporary, short-term loss since we purchased it a month ago.


Unfortunately, many of our users don't reap the benefit of the profits our models produce. Many don't take advantage of the success of our programs because they lack the disciplined will power to stay the course. We consistently see two issues cause repeated losses for investors...


The Two Most Common Mistakes Investors Make

Investors have two significant psychological challenges that are responsible for the majority of their losses. The first mistake is to over-estimate your ability to weather significant drawdowns in exchange for the promise of high returns. For example, for some investors, it's easy to think that they can handle a drawdown of -30% or more if they can get an annual return of 70%.


The first mistake is to over-estimate your ability to weather significant drawdowns in exchange for the promise of high returns.


When your portfolio is down by more than -30% right off the bat, costing you nearly a third of your savings without seeing a hint of gains producing 70%, nearly everyone has second thoughts about their willpower and toughness. Most amateur investors psychologically extrapolate recent past trends far into the future, and they bail out of their "can't lose" portfolio to avoid losing everything when it shows a losing position.

However, those equities you'll sell always seem to be at or near their lows when you throw in the towel, and your capitulation has locked in that -25% loss. With trepidation, you check back in a month and painfully see the portfolio is back to all-time highs. It's an old story, lived out in one corner or another of the investment world millions of times every year. If you're reading these words, has this ever happened to you? Yep, if you look around our imaginary virtual world, you'll see everyone's hand is up.

Secondly, a vast number of investors are performance-chasers, constantly jumping from advisor-to advisor, strategy-to-strategy, fund-to-fund, or guru-to-guru. When their latest high-flying investment choice crashes and burns, which is highly likely to happen after a period of exceptional performance, when these performance-chasers abandon that ship and seek another temporary outperformer.


Secondly, a vast number of investors are performance-chasers, constantly jumping from advisor-to advisor, strategy-to-strategy, fund-to-fund, or guru-to-guru.


What most performance-chasing investors don't realize initially is that reversion-to-the-mean is the most powerful force in investing. After a period of outperformance that prompts chasers to jump on board, a stock, investment approach, or guru's picks are likely to return to their long-term average and underperform. Vice-versa for times of underperformance, with investments or an investment approach surging higher to return to their long-term mean.

Some investors, determined to succeed, learn these lessons before too many losses pile up, and they discover a solution to the innate problems that humans encounter when investing. Some will realize that investing is a counter-intuitive pursuit. The "logical" approach that works in the rest of your life doesn't work when your choices are placed against millions of others like you competing in the cut-throat world of accumulating money.

It seems appropriate to buy a winning company after its equity price has been rising for some time (after all, it should continue rising, right?), and it seems logical to avoid a stock that has been falling (that loser will continue downward, right?). After all, you would correctly choose to buy a house in an area of your city where property values have been steadily climbing for many years, hopefully at a pace faster than average, and you would correctly hire an employee who has a history of climbing to positions of ever-greater responsibility, achieving consistent success year after year.

However, investing doesn't work like the rest of your life. Successful investing is counter-intuitive, and you can't apply the common sense approach you successfully apply to the rest of your life and hope to succeed in the world of investing. If it were that easy, everyone would be a multimillionaire, and life's money problems would dissapear.

But it's not that easy, is it?


The ETFOptimize Approach

The ETFOptimize Approach attains outperformance over longer-term periods by accurately identifying and avoiding significant investment risks. Our Premium Strategies use emotionless rules-based indicators that assess conditions each week. When increased risk is identified, our models automatically and appropriately adjust exposure to the overall equity market.

By programming each model to minimize or eliminate significant drawdowns, driven by diversified and uncorrelated risk-assessment indicators, our Premium Strategies avoid the performance-destroying drawdowns that can take months or years from which to recover. For example, buy-and-hold investors lost -56% in the S&P 500 during the Financial Crisis, requiring 5.5 years to return to the October 2007 high. Imagine that occurring when you are six months from retirement!

Each of our Premium Strategies use a different approach to identifying risk and selecting ETFs, but a common denominator across the board is that the models are likely to prefer ETFs that have a history of steady, consistent increasing value, rather than the absolutely highest performance.

To attain very high annual returns that outperform the market, many investors gamble on high-beta individual equities, which (by definition) have much higher volatility than the market. With this approach, investors must accept the risk of a severe selloff in exchange for the possibility of exceptional outperformance. As discussed above, the severe selloff invariably precedes the exceptional returns and investors often give up.

Each of our six, individual Premium Strategies uses different composites of indicators from more than 50 possible data sets (see Indicator List). Each model uses an approach that's uncorrelated from the other models, with different composites of indicators to identify and avoid risk.

Chart 4 below shows our ULTIMATE 6-Model Combo Strategy combines the ETF selections of all these sub-strategies, providing uncorrelated diversification of both approaches and selections, and achieves even lower drawdowns that average just 12.69% since 2007.


ULTIMATE 6-Model Combo Strategy
ULTIMATE 6-Model Combo Strategy

Chart 4: Our ULTIMATE 6-Model Combo Strategy has outperformed the S&P 500 by about 13% this year.


Our models hold their positions for an average of about 4 months, which allows time for longer-term tends to play out and make a consistent contribution to the overall model's performance. Our more aggressive equity-based models generally trade more often that the average, while our very conservative, Fixed-Income/Defensive Strategy that feeds our Equity/Defensive (4 ETF) Strategy has a holding time of nearly 7 months.


The Federal Reserve is the Elephant in Every Investor's Living Room

From the post-Great Depression years through the 1990s, investing was primarily based on stock's fundamentals. Inspired to build an intelligent foundation for the investment industry after the "Roaring 20s" and the 1929 market crash that launched the Great Depression, Warren Buffett's mentor and professor at Columbia University, Benjamin Graham, published his famous investment tome "Security Analysis" in 1934.

Out of Graham's fundamental distinction between investment and speculation, the analysis of corporate balance sheets, income statements, market share, and valuations became the primary considerations of a generation of successful investors like Buffett, Seth Klarman, Joel Greenblatt, David Dremen, Bill Miller, Howard Marks, and Charlie Munger.

During those decades, the Federal Reserve was not a significant influence on the market, other than relatively slowly implemented changes to interest rates. The Fed was part of a then-invisible giant government bureaucracy, not the popular spectator-sport it is today, with entire 24-hour cable channels devoted to the ratings-driving political "stars" of one party or the other. Before Alan Greenspan became the Fed Chairman in 1987, the Fed didn't even hold press conferences or announce their plans beforehand, as is the practice today. Sometimes it seems as if current Fed Chairman Jerome Powell appears on TV every other day.

However, in today's mature (Ray Dalio would say "late-stage") US economic/investment environment, fundamental factors are far less crucial than they used to be. Yes, fundamentals still have a very long-term, gravitational pull that influences prices, but based on our most recent research of the dominant factors affecting stocks prices, fundamentals have dropped far down the list of the most significant influences on stock prices.

In recent years, the machinations of the US Federal Reserve have become the single most significant determinant of the overall direction and rate-of-change of the US stock market. The Fed is the elephant in the room for every investor today, whether they know it or not. It's likely that 70-80% of the readers of this article have never known an investment environment without the bullish influence of the US Federal Reserve Bank.

That's because for the last 14 years, the Federal Reserve, or Fed, has run an enormous and risky experiment, dubbed "Quantitative Easing" (or "QE") by former Federal Reserve Chairman Ben Bernanke when he introduced it to America in September 2008. QE was actually invented in Japan in the 1990s, then copied in the US. QE began when each country's Central Bank had already lowered interest rates to zero percent and still needed more juice to keep the economy afloat.

Quantitative Easing involves the Fed's buying of Trillions of dollars of longer-term US Treasury Bonds and Mortgage-Backed Securities (MBS), intended to both 1) lower longer-term interest rates by creating demand for treasuries – and 2) create additional money supply in the economy. By purchasing longer-term Treasuries and MBS held as interest-earnings assets by the banks, the Fed deposits that money in the bank's reserve accounts, providing banks with an increased capital base it can lend out as business loans or mortgages, thereby expanding the economy.

Banks multiply those deposits by a factor of 10X through the fractional lending system, and are incentivised to lend out those funds because otherwise, the Fed converted interest-earning assets to non-earnings cash. With interest rates significantly reduced, and banks practically forced to make loans easily, businesses take advantage of the easy money. These policies have their own set of unintended consequences, such as zombie companies that are kept alive by the nearly free money that's being handed out.

The Fed manufactures these trillions of dollars of new funds at the push of a button, out of thin air, because it was given control of the US monetary system by an act of congress.

Chart 5 below shows the Total Assets (balance sheet) of the Federal Reserve, growing from a flat and non-controversial $720 billion from 2004 through late 2008, with money supply steadily growing to accomodate the long-term economic growth. Monetary policy was originally done through control of interest rates, lowering them to stimulate and raising rates to tighten the economy. However, when the 2007-2009 Global Financial Crisis threatened to take down the US and world financial system, the central bank had to lower rates to zero.


Chart 5: Since 2003, Quantitative Easing has caused the US Federal Reserve's Balance Sheet to increase by 1,000%.



The Fed more than doubled its Balance Sheet from September-October 2008, going from $910 billion to $2.250 Trillion during the gray-shaded band that represents the GFC recession. The Fed paused for a while, then it began stair-stepping the balance sheet higher to $4.5 Trillion in 2015. The Fed tried to shrink its balance sheet in 2018-2019 and reduced it slightly to $3.8 Trillion.

However, when the Covid Pandemic crashed the market (-34%) in February-March 2020, the Fed was put into a predicament that nobody had ever seen before. The Pandemic wasn't an economically-induced decline. It was a new variety of crisis that the world hadn't seen for 100 years. The widespread shutdowns of the world's businesses occurred literally overnight. Everything was fine one day, but the next day, all commerce came to a screetching halt – indefinitely.

Politicians in Washington – elected by the public based on their ability to effectively harange the other side's policies, regardless of credibility – were caught off guard when they needed to actually make policy. Many of America's elected officials had no experience in making policy, and were only effective at making mad-cap statements when in front of a camera – the more outrageous the better.

Economists warned that the pandemic could cause an economic decline far worse than the Great Depression, let the big guns roar and pumped a whopping $3 Trillion into the financial market in a period of just 10 weeks – from February 23 to June 6. It paused for a couple of weeks in June 2020 to catch its breath, but then the Fed began its average of $120 Billion-per-month buying spree in July 2020.


The Fed Balance Sheet and the Stock Market

The Federal Reserve's balance sheet declined to $3.8 Trillion by mid-2019. Then the Fed began printing free money again, increasing its balance sheet slightly from September 2019 to March 2020 because the data was showing that the economy was slowing, and a recession was likely imminent. But with the onset of Covid in late February 2020, that recession saw an abrupt onset and was dramatically exacerbated.

Chart 6 below provides a closer examination of the effects of growth and decline of the Fed's Balance Sheet (blue line, left scale) on stock prices (S&P 500, red line, right scale) from 2013 to present. When the Federal Reserve stopped buying Treasuries and MBS in 2015, stocks became volatile.

From March 2018 through September 2019, the Fed was actively shrinking its balance sheet (yellow highlight), and stocks (red line) saw steep declines, including the 2020 Covid Crash. Notice how the red line (S&P 500 price) began to experience significant volatility during 2018-2019 as the Fed reduced its balance sheet (yellow highlight) at a faster pace.


Chart 6: This chart shows how increases or decreases to the Fed's Balance Sheet affects the S&P 500 Index.


The Federal Reserve began printing more free money in late 2019, increasing its balance sheet because data showed that the economy was contracting, and a recession was likely. However, with the onset of the Covid Pandemic and America's first deaths (out of more than a million today), things changed rapidly.

As the Covid Pandemic caused sprawling business shutdowns across the US, the Fed unleashed the Kraken, pouring $3.5 Trillion of free insta-money into the financial system during the months of March-May 2020. The Fed's Balance Sheet surged to $7.2 Trillion, and these funds immediately began finding their way into the stock market.

An additional $120 billion per month was pumped into stocks from July 2020 to November 2021, when the Fed announced that it finally believed in the inflation (that the Fed itself had caused). Growth of the Balance Sheet began to slow but continued as of the Fed's report last week, on May 11, 2022.

Investors reaped the benefit of the $5 Trillion of new money created out of thin air over the last two years, but those trillions also played the most significant role in causing the inflation we see today. Yes, inflation was dramatically exacerbated by supply chain backlogs caused by Covid. But without the Fed's increase of the money supply, the supply-chain-related inflation probably would be "transient."

Quantitative Easing is done because the Federal Reserve has consistently lowered interest rates, year-after-year since September 1981's post-Chairman-Volker high, when the Fed Funds Rate reached 15.84%. It was raised to this now-inconcievable level to subdue price increases the last time we had a dramatic bout of inflation.

Compare 1981's Fed Funds Rate at 15.84% to today's rate at just 0.75%, and you get perspective on interest rates. The Fed's rate increase to 0.75% is already causing bad outcomes across the economy, and the flat yield-curve has already signaled that a recession is imminent.


The Potential for a "Waterfall Selloff"

It's possible that because of the 14-year, Fed-driven bull market (the longest in history), the selloff we're experiencing in 2022 may have an exacerbated emotional response that will soon play out as a waterfall selloff. Waterfall selloffs of the equity market result when an unexpected news event prompts millions of investors to simultaneously log into their online brokerage account or call their investment advisor, yelling emotionally into the phone to "SELL - SELL - SELL!!!"

These incidents usually occur when a new development becomes a freak-out moment for the masses. The last two times this happened were the Covid Crash in March 2020 and the September 15, 2008 market selloff following the Lehman Brother's bankruptcy announcement. Of course, stocks were still climbing when the Covid Crash hit, but pandemics are a (hopefully) once-in-a-lifetime occurrence that appears out of the blue.

When investors panic all at once, fund managers and investment advisors get forced to close out positions at any price they can obtain. The other dynamic behind massive forced selling is that few (if any) buyers are on the other side of the trade. In this situation, institutional buyers and market makers will only step in if stock prices are at bargain-basement, can't-lose levels. However, it still requires gonads of steel to step up when uncertainty is so widespread.

One of the most obvious things that is a sign of a Waterfall Selloff is the fact that all ASSET CLASSES become correlated and fall simultantously. In that circumstance, there is no place to hide and investor must sell to hold cash through the turbulance.

ETFs are usually less prone to forced selling because they have "Authorized Participants," capable of creating or eliminating shares of ETFs as needed. It does help to have deep-pocketed banks who can come in to support prices, but those banks can't prop up asset prices forever if assets are legitimately being repriced downward because of the onset of a severe recession!

During 2020-2021, when the Fed was keeping rates near 0% and pumping a steady $120 billion per month into the financial system (QE) to combat the effects of the Covid Pandemic, stocks were in an equally steady uptrend. But when the Fed announced it was beginning a tightening cycle to control the inflation that resulted from its overstimulation, the steady uptrend was broken, and a steady downtrend began. Eventually, that steadiness will be broken when animal spirits cause investors to flee for their financial lives!

Chart 7 below shows with green and red trendlines the dramatic influence of the Federal Reserve on equity prices, specifically the SPDR S&P 500 ETF (SPY). During the super-easy-money, stimulative policy following the March 2020 Covid Crash, the S&P 500 was in an amazingly fast-paced climb higher. SPY gained a whopping 127% from the Covid-Crash low near 210 until SPY's all-time high on January 3, 2022, at about 476.

Even if we ignore the Covid Crash and instead begin measuring when SPY recovered to its February 2020 closing high at 327 on August 10, 2020 (after only five months), the S&P 500 ETF still gained a surprising 48% through the January 3, 2022 high.


Chart 7: A green trendline identifies the bullish uptrend during easy-money stimulation, with the red trendline matching tightening policy.


Notice that the green-dashed uptrend line identifying the post-Covid, Fed-induced bull rally was broken to the downside in January as the stimulative bull market gave way to the contractionary tightening policies that are beginning to take effect. This trendline break is identified by the first blue downward arrow and a yellow highlight on the chart.

Subsequently, the red-dashed downtrend line highlights the 2022 selloff caused by the start of the Fed's tightening cycle. Notice that the downtrending line was running along the S&P 500 ETF's (SPY's) consecutive lower-lows, but the red-dashed downtrend line was also pierced, as identified by the second blue downward arrow and yellow highlight on the chart.

Chart 8 below shows a zoom into a tighter, 1.2-year view of Chart 7 above. In this chart, we can see how stocks broke the red downtrend line with a gap lower about six days ago.


Chart 8: A zoom into Chart 7 above shows more clearly the bullish and bearish trendline breaks that have occurred this year.


A classic tenet of technical analysis is that a broken Support line becomes the first level of Resistance to the upside (and vice-versa for broken Resistance becoming the first level of Support). Since the S&P 500 is now trading below its previous Support line, that line is now Resistance and will prove a difficult level to return above.

The break below the red trendline represents the S&P 500's acceleration downward as we draw closer to the Fed's beginning to reduce its Balance Sheet in early June. A reduction of the Fed's Balance Sheet represents a significant change to its policy.

The Fed Balance Sheet has been a source of market support whenever needed for the last 14 years. Whenever the S&P 500 began to weaken, particularly if it drew close to falling more than -20% below its previous high, the Fed would step in with additional money supply through QE, and stocks would recover higher.

However, the Fed's Balance Sheet will soon become a drag on investment markets, as it will need to soak up an increasing supply of Treasury Bonds sold by the Fed, resulting in higher interest rates in longer-term bonds. Higher rates and a reduction of the money supply are significant drags on the economy.

However, for all the tightening talk since last October/November, when Fed Chairman Jerome Powell finally acknowledged that the inflation from which Americans were suffering was legitimate and not "transient" (his favorite characterization of inflation throughout late 2020 and 2021), the Fed has done very little. Interest rates were increased by just 75 basis points, and there has been no Quantitative Tightening or QT to date. As of the date of this article, the Fed is still buy assets for its balance sheet and infusing funds as a stimulus to the economy.

Nevertheless, the inverted yield curve that was already triggered earlier this year signaled the start of the clock until the next recession (usually 6-11 months), which are always accompanied by a bear market for stocks (defined as a decline of more than -20% from the previous high for a long duration).

However, if you are already a subscriber to an ETFOptimize Premium Strategy, you are in the best position to ensure your investments survive and thrive as the world works through the coming challenges. Our Premium Strategies are designed to identify and mitigate/eliminate the risk of loss, thereby providing our clients with a portfolio that climbs every year, achieving your saving objectives. If you are not yet a subscriber, you may wish to become one ASAP to make sure you get up-to-date risk analysis and ETF-position selection before a waterfall selloff begins.


Adjustments Coming Soon

We are currently in the process of finalizing some new indicators that have proven to be superior for the modern investment environment, and we're putting together the written text, statistics, and charts for a set of new Premium Strategies that should allow each of our models and our ULTIMATE Strategy (a combination of six different models) to attain greater diversification into assets that can climb higher regardless of the market environment.

Recently limited to a cash-proxy ETF instead of profitable defensive bond ETFs (a current limitation) has caused several of our models to not perform to our standards. Our new indicators and models will provide alternatives from which an investor can choose to build a more customized ULTIMATE 6-Model Strategy. This approach will provide even more consistent profits, even when the Federal Reserve conducts an unprecedented market manipulation exercise.

We'll send an email as soon as the article introducing our new Indicators and Premium Strategy options is available. Again, thank you for your patience—we are trying to anticipate issues and provide as much accuracy and effectiveness as possible before publicly releasing the new features.

See Part 1 of this article "Waterfall Selloff Ahead"





For SUCCESS with a Rules-Based, Data-Driven Investment Model, PLEASE FOLLOW YOUR STRATEGY'S GUIDANCE 100% – Don't SECOND GUESS your Emotion-FREE Model!

Investor’s all-too-human emotions and subconscious biases relentlessly sabotage their investment results. Trying to follow the news or any other discretionary, judgment-based approach will only exacerbate these underlying challenges, invariably causing investors – whether amateur or professional – to buy after a stock has been rising (high) and sell near the bottom (low), capitulating to avoid losing more. Buying high and selling low attains the opposite result of a classic successful investment approach.

A carefully crafted, systematic investment strategy will eliminate these issues — BUT — you must follow your strategy's recommendations without second guessing them! Execute your strategy's trade recommendations TO THE LETTER if you wish to succeed and match your model's historical and prospective results.

That doesn't mean every trade will be a winner, and the selections will often be counter-intuitive – or they might go against the current generally accepted "wisdom" of the market. However, the probability that you'll succeed reach your long-term financial goals is far greater if you use a scientifically tested, rules-based strategy.

The ETFOptimize Premium Strategy lineup doesn't collectively (across six models) have a record of more than 100 consecutive years of profitability without a good reason:

Rules-based, data-driven investing works!

However, it only works... if you work it as designed!



If you have questions about this content, please contact us at your convenience via our Support Ticket system. Usually, we'll respond much sooner, but please allow 24 hours for a Support Team member to respond. We also hope you will take a moment to provide us with feedback on the site content and design, new features, and our product line. Your input is much appreciated!

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