Benefits of Rules-based ETF Investing

Benefits of Rule-based ETF Investing

Benefits of Rules-based ETF Investing


Your algorithmically based, quantitative ETF investment strategy provides you with many advantages that the vast majority of investors do not have, including these two:

Exchange Traded Funds (ETFs) provide the advantage of instant diversification, which to match would require an individual investor to own many dozens or hundreds of stocks. Furthermore, ETF investors are never the victim of abrupt price swings caused by earnings disappointments, management upheaval, or accounting scandals that take place regularly in individual company equities. To learn more about the advantages of ETFs over individual stocks and mutual funds, see this article.

Quantitative, rules-based investment strategies provide an investor with the instant analysis of thousands of data points about thousands of publicly traded companies. Your Premium ETF Investment Strategy instantly analyzes all of these data points and determines the most favorable ETF to own at any given time based on algorithms that were created by strategy designers with decades of successful experience in the investment markets and designing quantitative strategies. Each strategy is back-tested, forward-tested, stress-tested, robustness-tested, real-time tested, retested, and retested again before ever being considered eligible to present to our subscribers. Furthermore, the decisions of your strategy are always made with crystal-clear logic that is never influenced by fatigue, time limitations, family problems, over-enthusiasm, mood swings, hopes and dreams, or the decision-maker simply having a bad day.

Don't negate all of these advantages of quantitative investing by overriding the recommendations of your strategy!

Now you can take advantage of an honest-to-goodness breakthrough in the world of investing – a legitimate paradigm shift, made possible by the application of state-of-the-art technological resources to the challenges of noisy, volatile financial markets.


Many don't realize that the investment world is currently experiencing the greatest transfer of wealth in history, possibly because the business and investment media are loath to talk about the slow death of a major source of their income (advertisers). We're talking about the prodigious abandonment of active stock and mutual-fund investing in favor of investment in passive, index-based Exchange Traded Funds (ETFs). Because of the embarrassing track record of mutual fund managers and other advisors in managing saver's retirement funds, with 98% underperforming market indices over consecutive 10-year periods, an enormous number of investors are choosing to simply buy-and-hold an index-based ETF such as the S&P 500 ETF (SPY), which has achieved a 7.4% gain over the long-term (mutual funds have only gained an average of 2.6%).


As a result the accelerating abandonment of active investing, in 2017 active mutual funds saw withdrawals of $428.7 billion while investment in passive, index-based Exchange Traded Funds (ETFs) was $691.6 billion, more than double the $419 billion invested in passive funds in 2016. Standing at $6.68 trillion in assets under management (AUM) today, by 2025 ETFs are expected to have $25 trillion in AUM as they grow by more more than 100% per year and the pace is increasing.  Learn more about this generational shift in the investment world.


This transfer of wealth into a relatively new investment vehicle (when compared to mutual funds that have been around since the 1890s) has created demand for investment advisors who can add some additional performance to passive, ETF-based portfolios. The secret to dramatically improving the returns over buying and holding a passive ETF is to simply add a little bit of activity. The usual approach is a system that automatically rotates into a more defensive ETF position when a market contraction begins, thereby mitigating drawdowns and losses. When the market is accelerating higher, an well-conceived ETF strategy can rotate money into a more aggressive position and thereby, capitalize on increased profits from that rally. However, these approaches can add the risk of the same lousy, discrtionarydecisins that are the source of the death-knell for mutual fund and individual-stock investing. Individual investors don't want to jump out of the frying pan just to fall into the fire.

If an ETF advisor is making those decisions based on discretion and backed by their 'experience,' on errant data or a poorly-conceived strategy,

There have been a small number of boutique firms that pioneered ETF rotation strategies for their clients, and this service has recently been embraced by large, well-known investment firms that are seeking to retain their clientele who are abandoning their stockbrokers in favor of low-cost, highly diversified passive ETFs.

Combining decades of experience in investment-strategy design with today's advanced computer capabilities and novel programming approaches, ETFOptimize has shocked the investment industry by offering a set of asset-selection systems that utilize 28-different criteria, based on macroeconomic indicators, readings of market internals, and instant analysis of the performance of critical segments market to determine the intermediate-term direction of of stocks and bonds. Our approach offers a quantum leap in ETF strategy performance that blows by the existing offerings that depend on one, or at most just a few indicators for determining market exposure and asset selection. The result is that ETFOptimize provides a selection of highly profitable, consistently robust investment strategies from which investors can choose to meet their wealth-accumulation needs.

Our approach offers a quantum leap in ETF strategy performance that blows by the existing offerings that depend on one, or at most just a few indicators for determining market exposure and asset selection. The result is that ETFOptimize provides a selection of highly profitable, consistently robust investment strategies from which investors can choose to meet their wealth-accumulation needs.

Our suite of subscription ETF-based strategies rely on advanced algorithms using quantitative ranking and sophisticated timing systems that automatically assess a variety of measures of the conditions of the market and the economy, resulting in the selection of the optimum ETF to hold in a portfolio at any given time. Within the parameters of the different investment approaches, the objective of each strategy is to achieve the maximum risk-adjusted returns possible. By "maximum risk-adjusted returns," we mean the highest possible portfolio performance that can be achieved with the least amount of drawdowns, volatility, and stress.

The sophistication and effectiveness of the ETFOptimize strategies is truly a breakthrough that could revolutionize investing.


We have several strategies to choose from, each allowing an investor to meet a variety of wealth-building objectives with approaches that seek to satisfy a range of investor's needs. Subscribers can choose from strategies based on risk tolerance, holding time, max drawdowns, the number of ETFs held in the portfolio, and more. We also plan to introduce several new strategies in the coming months that will fill some gaps between strategies in the the group of five we currently offer.

Each week our sophisticated ETF-rotation models combine the systematic analysis of more than two-dozen proven financial market 'tells' with multiple, state-of-the-art econometric and asset-specific databases to create smooth, high-return investment performance through any kind of market environment – bullish, bearish, or sideways and volatile. Whatever drama is occurring in the market is irrelevant, because the ETFOptimize strategies produce consistent profits, month after month – year after year.



The average annual returns for our Suite of ETF Strategies range from 15% to 35% compound growth per year (since inception), depending on the strategy selected. Perhaps best of all, 100% of all years are profitable for each of our strategies. On average, max-drawdowns are reduced to less than about one-quarter of what occurs in the overall market, and risk-adjusted returns (which take downturns into consideration) are nearly off-the-charts, with an average Sharpe ratio of 1.51 and an average Sortino ratio of 2.22.

Our Optimized Equity Rotation (2 ETF) Strategy, (shown below) produces the highest performance available from our Suite of ETF Strategies with an average annual return of 35% since inception. The strategy regularly chooses the top two equity-based ETFs from a universe of 216, well-vetted equity ETFs. In the last 12 months, the performance of the strategy has accelerated and it has produced a return of 76%, with a drawdown of just -4%. While the S&P 500 produced an exceptional return of about 26% in the last year, our Optimized Equity Rotation strategy tripled that return.

Asset Allocation-2-4-eq-fixed
Our Optimal Equity Rotation (2 ETF) Strategy shows an average return of 35% since inception in 2006 with a return of 76% last year. See details.

Notice from its chart (above) the Optimized Equity Rotation (2 ETF) Strategy's steady climb higher (red line, top window) occurred without a significant profit-destroying drawdown – including during the Financial Crisis. Whenever economic and market conditions drop below a certain threshold, this strategy sells its ETF positions and moves to cash, resulting in a total return that is more than 17-times higher than the S&P 500's performance (blue line).

The total return for the strategy from July 1, 2006 to present is 3,139%. During that 11.5-year span, the strategy turned every $100k invested into more than $3 million. The "Optimized Equity Rotation (2 ETF) Strategy" is just one example of the many choices in our Suite of ETF Investment Strategies, ensuring there's an approach that is perfect for every investor's wealth-building objectives.

As shown by the chart below, in the last 12 months our Optimized Equity Rotation (2 ETF) Strategy's pace of gains accelerated, with a return for the last year of 74.52% (while SPY, the S&P 500 ETF, gained 25.92%). During the previous year, this very high-return strategy had a maximum drawdown of just -6.09%. Clearly, that's a very high risk-reward ratio, as reflected in the strategy's amazing 2017 Sharpe Ratio of 4.32.

Our Optimal Equity Rotation Strategy produced a return of 74.52% in the last 12 months, triple the return of the S&P 500 (26%). See details.

The combination of protection against market turbulence and significant downturns, combined with exceptional performance by selecting the optimum equity ETF at all times, provides an unbeatable performance package for investors seeking the highest returns.


The ongoing transfer of nearly $50 billion per month into passive ETFs has created a significant demand for a way for investors to attain a higher performance than the 6% - 8% annual return that is the average for the market. Investors need a systematic way to select the best, high-performance ETF's at any given time, without making the discretionary decisions that have historically resulted in terrible performance.

Most of all, investors want to avoid the return-destroying losses that a portfolio can experience whenever the market enters into a deep correction or bearish conditions. Many investors are discovering the benefits of a strategic, ETF-rotation alternative to passive, index-based investing. By adding just a little bit of activity and rotating from one passive ETF to another a few times a year, returns can be doubled, tripled, and much more.

Our strategies oversee the selection of ETFs, enhance the timing, and provide much higher returns at much lower risk than just buying-and-holding a selection of passive ETFs. ETF-based rotation strategies that add a slight bit of activity (with trades occurring just 2-6 times per year) deliver far better returns than index-based ETFs, but with substantially less risk and very little trading activity.

ETFOptimize has constructed a growing suite of quantitative investment strategies that make exclusive use of passive, index-based Exchange Traded Funds (ETFs). By rotating into the optimum ETF at the optimum time, our strategies turn market downturns or selloffs into profitable opportunities instead of potential calamities, reduce the systemic risk in the market, dramatically increase returns, and help investors achieve their financial goals without having to worry about a distaster like the Financial Crisis of 2008-2009 up-ending their retirement plans.


Each week, our Suite of ETF Investment Strategies automatically assess more than two-dozen proven financial market 'tells' with multiple, Wall Street caliber databases to create smooth, high-return investment performance through any kind of market environment – bullish, bearish, or sideways and volatile. Our models utilize sophisticated algorithms that automatically analyze a broad spectrum of financial, market, and macroeconomic data series to make high-probability, systematic decisions about the optimum ETF to hold in a wide variety of conditions. Whatever drama is occurring in the market is irrelevant, because the ETFOptimize strategies produce consistent profits, month after month – year after year.

We know of no other subscription-strategy provider utilizing a comprehensive set of macroeconomic signals, as well as multiple market-breadth indicators, revenue, profitability, and many other aspects of the various market segments, sectors and industries to determine the most effective and profitable choice of ETF to hold at any given time. The few other ETF strategy providers that exist are using very simple quantitative approaches that depend on single-factor analysis of characteristics such as momentum or value

According to David Byron, Founder of the Quantitative Investing Institute, "The sophistication and effectiveness of the ETFOptimize strategies is truly a breakthrough that could revolutionize investing. By incorporating multiple, key macroeconomic and measurements into the strategy engine, ETFOptimize has dramatically increased the accuracy of their trade signals. The result is precision and effectiveness that is groundbreaking."

The quantitative, weekly assessment of conditions by our strategies selects the optimum ETF(s) to hold at any given time while meeting each particular strategy's total return, risk-tolerance, and trading-activity objectives. Transactions take place infrequently, with an average of two to seven months between trades. ETFOptimize adds just the right amount of systematic activity to turn passive, index-based ETF portfolios into powerful performance machines that produce returns that are as much is 10-fold better than a buy-and-hold approach using those same ETFs.


Returns for the ETFOptimize Strategies range from 15% to 35% average compounded growth per year with 100% of all years profitable (57 of 57 total years) across all strategies. On average, max drawdowns are reduced to less than 1/4th of what the overall market experiences across the span of a strategy's long-term performance (sinve inception). When a deep selloff or bear market begins, our systems have already rotated into cash or the optimum defensive ETF, thereby turning the tables and transforming every market downturn into an opportunity to add profits.

As an example of how well our strategies profit during downturns, our Asset Allocation: Optimal Equity and Fixed Income (4-ETF) Strategy (shown below) has never had a losing year and outperformed the market by 48.70% during 2008 (the worst year of the Financial Crisis). When a deep selloff or bear market begins (such as during the Financial Crisis), our trading systems detect the change of conditions early and have already rotated into the optimum defensive position, thereby turning the tables and transforming every market downturn into an opportunity for profits.

Our Asset Allocation: Equity/Fixed Income (4 ETF) Combo Strategy provided an average return of about 28% since inception. See details.


One of the primary features of the ETFOptimize strategies is their  exceptional performance during market downturns. Each of our strategies has been designed to mitigate drawdowns as much as possible within the constraints of its approach – and, depending on the strategy, even produce positive returns by turning the tables on deep corrections and market selloffs.

The reason that the mitigation of drawdowns is constrained by each strategy's approach is that some of our strategies (such as our Asset Allocation (2-Asset) strategies) are designed with intention to become more defensive and battle against an equity downturn by optimizing the defensive component, which means selecting the strongest Fixed Income ETFs for the portfolio. In this way, when equities are weak or declining, the fixed income component takes the lead and is responsible for mitigating losses and even gaining ground as the market declines.

On the other hand, a strategy that is designed to achieve the highest possible return (such as our Optimal Equity Rotation Strategy), does not include a defensive fixed-income component. The reason for this is that the fixed income component would moderate or even be a drag on the objective of maximum returns when conditions are bullish. For example, our Optimal Equity Rotation strategy garnered an amazing performance of 76% during 2017 – a time when the market was clearly in 'bull mode' with the S&P 500 gaining about 20%.

If the strategy had included fixed-income ETF's during 2017, they obviously would have reduced that exceptional 76% return from the optimal equity ETF's because in 2017, our Optimal Fixed Income Rotation strategy gained just 16.78%. While this is a phenomenal return for investors who need a conservative, stable fixed income strategy, it would've reduced the Optimal Equity strategy return to about 46%.

As shown in the chart below, during the Financial Crisis (from January 2008 to November 2010) this strategy produced an exceptional return at a time when the overall market was collapsing. You can see that beginning in January 2008 the S&P 500 (blue line) began its deep selloff that lasted until March 2009, ultimately dropping -56%.

During this period of deep crisis, our Asset Allocation: Optimal Equity and Fixed Income (4-ETF) Strategy produced a 20% return. It took until November 2010 for the S&P 500 to recover back to the level where it stood in January 2008, i.e., a zero percent return. In the meantime, this strategy produced a return of 100% – doubling the size of your portfolio – while someone invested in the S&P 500 ETF (SPY) was just breaking even after 2.8 years.


During the Financial Crisis, our Asset Allocation: Equity/Fixed Income (4 ETF) Strategy produced a 95% return at a time its 70%-30% Equity / Fixed Income benchmark was breaking-even over the course of 3 full years. See details.

Notice the strategy's (red line) steady climb higher without a significant profit-destroying drawdown, resulting in a total return that is more than 1,000% greater than the S&P 500's performance (blue line). The total return for the strategy during its lifetime from 2006 to present is 1,622.69%. During that time, the strategy turned every $100k invested into more than $1.6 million. The "Asset Allocation: Equity & Fixed Income (4 ETF) Combo Strategy" is just one example of the many choices in our suite of high-performance ETF Investment Strategies, ensuring there's an approach that is perfect for every investor's wealth-building objectives.


Our carefully engineered Ranking Systems select the optimum ETF to hold at any given time, whether stocks are in a bull market, bear market, or during volatile, sideways conditions. The objective of each strategy is always to produce the highest risk-adjusted return that is possible. By that, we mean achieving the maximum upside performance with the minimal downside risk.

For example, our "Multi-500:8 Factor" Ranking System quantifies eight groups of market internals and econometric relationships, assigning a weighting and numeric value to to a total of 26 factors and converting each into a composite score. Our Multi-500:8 Factor Ranking System performs an analysis of the following criteria on a weekly basis:

US Employment Trend,
Profit Trends of the nine S&P sectors,
Relative Market Volatility,
Market Breadth status,
Composite Analyst Sentiment for specific market groups,
S&P 500 Earnings Trend,
S&P 500 Relative Price Strength, and
Status of the High-Yield Bond Market

The nodes are combined using weighting determined by their historical correlative relationship to the price trend of various ETF groups. This composite data series is then aggregated to generate a rank that determines the proper exposure level that will be most profitable based on the early detection of economic and market trends, with the objective of maximizing gains and minimizing risk.

We never corrupt our carefully crafted ETF-rotation systems with our 'professional opinion.' Opinion-based discretionary decisions are the primary reason that professional fund managers have an embarrassing history of poor performance. At least in the field of volatile, noisy financial markets, substantial data shows that emotionless, computerized systems are superior to human decision-making for making investment decisions. Experienced, 'quant' investors will discover that our sophisticated algorithms and state-of-the-art databases make other ETF-investment strategies, typically based on simple momentum or value harvesting approaches, look like archaic dinosaurs from a distant past.


We make it effortless for you to accumulate profits with ETF investing.  With the high performance and low drawdowns our strategies provide, why would an investor spend time incessantly seeking the slightest edge to try and beat the market with individual stocks? Or why would an investor allow a mutual fund manager to make repeated money-losing mistakes, when you can sit back, relax and await the ETFOptimize signals – while getting much higher returns with much lower drawdowns in the process? By rotating between just a few ETFs a year with two-to-six months between trades, our subscribers are getting returns that on average, are more than TRIPLE the market's return.

Our model strategies are exceptionally easy to use for non-professional investors or independent investment advisors because they hold just 1-4 positions at a time and don't rely on the rapid churning of trades to generate their outstanding performance. While each portfolio is updated and signals are automatically assessed each week to rapidly respond to changes in conditions, rotation of the ETF(s) held in the portfolios occur with an average of 2 to 7.3 months between trades (depending on the strategy). Each approach uses ETFs that are pre-screened for issuer stability and liquidity, allowing them to accommodate any size of transaction or any size portfolio.

For example, our Asset Allocation: Equity/Fixed Income (4 ETF) Combo Strategy holds positions for an average of 106 days. That combination includes two Equity ETFs being held an average of 66 days (about 3.3 months), while the two Fixed Income ETFs are held an average of 146.75 days (approximately 7.34 months).

The low-cost, ETFOptimize Premium Strategy subscriptions provide you with detailed weekly updates for each strategy. Each strategy page is updated to show precisely the performance the model is achieving, combined with clear trade signals that provide details of which ETFs to buy or sell and when to make your trades to attain the highest returns from each trade.

Learn the secret of turning $10k into more than $300 million as you save for retirement.

Each of our low-cost, ETF-based investment strategies include clear Trade Signals sent to subscribers a day prior, whenever a strategy has a new transaction, including detailed buy/sell instructions and a profile of the ETF(s) being purchased. Subscribers also receive weekly Strategy Updates including comprehensive performance statistics and historical trade details, and our Optimum Market Profits© report, all published on a weekly basis.

ETFOptimize subscribers receive this entire package for just $19.95 per month. We don't try to soak you with big upfront fees or high monthly charges. We earn our living by by providing our customers with innovative and highly effective investment strategies – and through the success of those strategies we're rewarded with decades of customer loyalty. Our marketing approach is not to spend millions of dollars on advertising, but to build enormous army of enthusiastic customer-advocates that promote our services through grassroots word-of-mouth referral. As a result, our overhead costs are exceptionally low and we pass that savings on to you.


Every ETFOptimize strategy subscription is backed by a Two-Month, 100% Money-Back Guarantee. We promise that you'll be thrilled with the results you get, or we'll return your payment. This is an iron-clan assurance that you can try any of the ETFOptimize investment strategies risk-free and discover just how well they perform in real time. Unlike expensive investment advisories and mutual funds that never meet your expectations, once you witness the outstanding growth of your principle, we think you'll be convinced to keep your inexpensive ETFOptimize subscription for many decades to come.  Learn more about our high-performance, turnkey ETF strategies...

See our Suite of ETF-based Strategies



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