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ETFOptimize Strategy Performance
The ETFOptimize Investment Strategies utilize passive, index-based Exchange Traded Funds (ETFs), but then add a slight bit of trading activity (an average of just three trades per year) to optimize a portfolio's holdings for changes in economic and market conditions. The objective of each strategy is to consistently anticipate stock-market directional changes and rotate to the optimum asset for conditions, thereby increasing performance and minimizing risk. We know of no other service that systematically analyzes as many critical market drivers (as many as 38 factors and proprietary indicators are examined by our models each weekend) – giving you unprecedented performance with exceptional peace-of-mind.
As a result of adding this slight bit of activity each year, you get dramatically improved performance – on average, nearly quadruple the return of the S&P 500 with less than one-third of its drawdowns during market sell-offs. During long, contractionary periods – such as last occurred during the Financial Crisis – most of our strategies provide investors with robust gains while those around you are losing substantial sums of money. Other strategies moved to the safety of cash during these bearish periods.
In fact, some of our strategies provide exceptionally strong gains as the market declines. By adding just a small amount of activity (trades occur with an average of 3.83 months between transactions) to a portfolio populated by a 1-4 passive, index-based ETFs that offer ample diversification, our subscribers can obtain a dramatic increase in their investment returns, with less time required and stressful moments eliminated.
An individual investor can now take advantage of leading-edge, quantitative investment systems that were formally only available to extremely wealthy individuals through hedge funds and other sophisticated investment approaches. These quantitative systems can provide you with consistent, robust performance, and downside protection at a level not seen prior.
This resource page provides documentation of the performance of our strategies collectively. To see the individual performance details for each strategy we offer, please view individual strategies in our ETF Investment Strategy Preview section at this link.
A Note On Repeatability of Strategy Performance
ETFOptimize has focused a substantial amount of energy toward minimizing downturns and losses in our proprietary strategies. It may even be appropriate to say that it is our number one objective when we build a strategy. There's a good reason for that being a high priority. It is so important that the most successful investor of all time, Warren Buffett, has two rules that he recommends to every investor: Rule #1) Never lose money, and Rule #2) Never forget rule number one.
To accomplish this objective, the ETFOptimize strategies use several tools built into our quantitative systems. The first is that each strategy is quantitative, thereby eliminating the risk that accompanies all human beings, who are prone to making less than optimal investment decisions, resulting from the influence of emotions on financial decisions. There is even a growing field of study called Behavioral Finance that identifies the anomalies in human psychology that cause these errors in judgment.
A second tool is that we exclusively use Exchange Traded Funds (ETFs) in all our strategies. ETFs represent indices based on the shares of dozens, hundreds, or even thousands of individual stocks, and while they do not provide you with diversification from systematic (market) risk or sector/industry risk, they do inherently provide you with protection from idiosyncratic, individual-company risk (such as occurs if a company's product becomes obsolete, or a key executive leaves the firm, etc.)
The third tool is that we build our strategies to be extremely robust – each week analyzing as many as 38 different macroeconomic, internal-market, stock-fundamental, or technical factors that can affect the performance of stocks and bonds, thereby providing a far higher degree of signal quality than alternative investment approaches that use just one, two, or a few factors. If your quantitative strategy determines that risk has increased in the economy or the market to a certain level, the strategy will exit its current positions and rotate to a cash-proxy or defensive position (depending on the strategy). Even if you see no sign of risk, if your strategy makes a change like this, the risk has been identified beneath the surface and you are being proactively protected from potential loss.
Each investor has a different level of risk tolerance, goals, life situations, etc., and will arrive at different decisions about the opportunity an investment offers them. We have designed the ETFOptimize strategies to minimize the risk of permanent loss by making very conservative decisions. That means erring on the side of loss mitigation – sometimes at the expense of performance. However, that loss-mitigation contributes a significant amount to overall, long-term performance. It also gives you the peace of mind you need to always trust your system and follow its guidance.
Strategy Performance Since Inception
At the time of this update, the ETFOptimize Premium Investment Strategies have an average Annual Return since inception of 30.53%. Each of our strategies has been operating for a minimum of 12 years. The returns range from a low of 12.41% for our least aggressive, S&P 500 Conservative (1 ETF) Strategy to our highest performing system, the Adaptive Equity Rotation (2 ETF) Strategy, which has an average annual return of 34.90%. This average is more than quadruple (415%) the long-term annual return of the market (at 7.35%), represented by the S&P 500 (including dividends), and more than eight-times the performance of the S&P 500 since 2000.
In 2017, each of our strategy's performance increased, and scored an average annual return of 45.15% – more than double the impressive 2017 return of the S&P 500 index, which itself had an outstanding 2017 return of 19.42%.
When the market is performing well, our strategies capture those gains and magnify them, often producing a multiple of the market's return. When the market is performing poorly or in a bear market pattern, our strategies still perform well, either not losing money when stocks do or profiting during downturns, depending on the approach employed. Perhaps best of all: our strategies have never experienced a money-losing year - that's 66 of 66 years collectively!
Out-Performance of Benchmarks
Since inception, our premium ETF Investment Strategies have an average annual out-performance of their market benchmarks of 22.51% across all strategies. The highest average annual outperformance comes from our Adaptive Equity Rotation (1 ETF) Strategy, which has an average annual outperformance of 29.92% over its benchmark (see details).
Our strategies, while profitable every year since inception, have also outperformed their benchmarks in 53 out of 57 years – 95% of the time. During the four years of underperformance, it was only by an average of less than 2%.
Maximum-Drawdowns (MDD) that are One-Third of Market's MDD
The ETFOptimize strategies have an average maximum drawdown (peak-to-trough decline) of less than one-third that of the market's maximum drawdown (-18.65% vs. -56.78%). Plus, our strategy's maximum drawdowns usually only last for a very short time – a few days to a few weeks, at most.
Financial Crisis Performance: In comparison, buy-and-hold investors in the stock market, represented by the S&P 500, experienced a devastating, 17-consecutive month, -56% decline – from October 9, 2007, to March 9, 2009 – a financial disaster for many investors who watched more than half their life savings get wiped out.
However, there is an alternative. During that same period, all but one of the ETFOptimize strategies made significant profits (for example, a 26.48% gain for our Asset Allocation: Equity & Fixed Income Combo (4 ETF) Strategy, see details). The strategy that did not produce gains is designed to switch to a cash proxy during significant downturns, and that strategy held steady in the cash proxy - with no loss during that period (in fact, there was a small gain).
Each ETFOptimize model is designed to consistently rotate to the optimum ETF position that will produce the most robust and consistent gains. For this reason, drawdowns don't last long before rotation into another, more advantageous ETF takes place, thereby ensuring that upside performance resumes and the strategy continues producing profits.
Never a Money-Losing Year
After the two market crashes of the last 20 years - in which many investors lost more than half of their savings - not once, but twice, this performance detail may be of critical importance for many investors:
Since their inception, no ETFOptimize strategy has EVER experienced a money-losing year (collectively, 57 out of 57 consecutive, profitable years).
By consistently rotating into the optimum ETF when conditions change, each of our strategies quickly adapts to the economic and investment-market environment to provide for steady gains regardless of what's happening in the financial world.
One business-TV personality is famous for saying, "There's always a bull market somewhere…" That's true, and the ETFOptimize strategies analyze dozens of crucial indicators to identify the most favorable market segment, and then selects the ETF that best represents that segment. In this way, our strategies are always providing gains and eliminating the possibility of significant portfolio losses.
For many investors, the ability to sleep at night with peace-of-mind, without the stress and worry of losing money in their investments, can be the most important reward they can attain from using the ETFOptimize strategies.
What is your peace of mind worth? If it's worth more than $19 per month, you may want to consider trying our strategies. With a 60-day money-back guarantee, you certainly have nothing to lose!
Exceptional Risk-Adjusted Returns
With an average annual performance that is 4.15-times the average return of the S&P 500 and a maximum drawdown that's less than 1/3rd the maximum-drawdown of the S&P 500, you would be 100% correct in assuming that the ETFOptimize strategies have outstanding risk-adjusted returns.
Institutional investors, money managers, and other professional investors have long used measures of risk-adjusted returns as their primary method to evaluate the performance of various investment approaches. Unfortunately, most individual investors are often not familiar with the concept of risk-adjusted return measures and therefore, are conditioned to judge portfolio performance based solely on the annual return. (While our strategies offer outstanding annual returns - when measured by their risk-adjusted returns, their advantage is even more dramatic.)
Analysis of risk-adjusted returns is an excellent way to compare one trading system to another. If two model strategies were presented to you, each with the same annual performance and you can only choose one, how would you decide which one to select? Most investment professionals agree that the strategy with lower volatility, all else being equal, would be a superior investment approach because of its inherently lower risk.
High volatility in a portfolio or an investment can create a smorgasbord of psychological issues for investors, causing them to make subconscious errors that leads to poor performance or even severe losses compared to a simple buy-and-hold approach using an index fund. This is the reason that today's investors are pouring trillions of dollars into passive, index-based ETFs and have made them the world's go-to investment vehicle.
Risk-Adjusted Returns: SHARPE RATIO
Two well-regarded ways to measure risk-adjusted returns are the Sharpe Ratio and the Sortino Ratio.
The Sharpe ratio (developed by Nobel Laureate Bill Sharpe, PhD, Professor at Stanford University in 1966) looks at a strategy's or an investment's average return in excess of the risk-free rate of return, and divided by its standard deviation. By subtracting the risk-free rate (based on the US Treasury bill's return), one can see how much of an strategy's return is attributable to to the risk-taking activities of the approach. That number is divided by the standard deviation, or the amount of variation in prices. The lower this number, the better the Sharpe Ratio.
The Sharpe Ratios for our strategies range from a low of 1.15 to a high of 1.57, with an average of 1.49. In comparison, according to MorningStar, the Sharpe ratio of the S&P 500 index is only 0.45 over the last 20 years. Therefore, the ETFOptimize strategies have an average Sharpe ratio of 3.31 times the average ratio for the S&P 500.
One criticism of the Sharpe ratio is that it uses the standard deviation in its denominator as a proxy for portfolio risk. Standard deviation is a measure of the dispersion of ALL PRICES from their mean/average, so the Sharpe ratio does not distinguish between upside and downside volatility. This is an important drawback of the Sharpe ratio because it calculates its measure of a strategy while penalizing upside performance equally with downside losses.
Risk-Adjusted Returns: SORTINO RATIO
The Sortino Ratio (developed by Frank Sortino, PhD, in 1980) is a variation on the Sharpe Ratio that seeks to resolve this issue by differentiating negative performance, i.e., downside (harmful) volatility from positive performance, i.e., upside (good) volatility. The Sortino ratio calculation takes an asset's average return and subtracts the risk-free rate, and then divides that amount by the asset's downside deviation only.
ETFOptimize believes the Sortino Ratio is a more useful measure of Risk-Adjusted Returns because if an investment's or strategy's price action is significant to the upside, most would say that a rapid move higher is desirable.
The Sortino Ratios for our strategies range from a low of 1.95 to a high of 2.74, with an average of 2.22.
In comparison, according to MorningStar the Sortino ratio of the S&P 500 index has averaged 0.63 over the last 20 years. Therefore, the ETFOptimize strategies have an average Sortino ratio of 3.52-times the average ratio for the S&P 500 index!
As you can see from the data, statistics, and details of our strategies above, the ETFOptimize approach is an honest-to-goodness breakthrough in the investment industry. Never have so many datasets been used in combination to generate such robust signals of when to have long exposure to the market, and when to be out – when to use a leveraged ETF version of an index, and when to use an unleveraged version – when to hold cash, and when to hold an inverse asset.
The result is a set of models that never lose significant amounts and have never had a money-losing year. The consistently higher performance virtually eliminates the risk an investor will make an emotional mistake caused by the stressful downturns that regularly destroy a family's or individual's financial stability.
In addition to the highly accurate strategic component that virtually eliminates losses, the ETFOptimize strategies add a tactical element that consistently selects the ETF representing the optimum performing segment of the market, at any given time, thereby producing the highest returns possible.
The result of this combination is a set of investment models that each have near-45-degree-angle charts higher – documenting the astoundingly consistent performance attained by these strategies. Take advantage of this once-in-a-generation breakthrough in the investment industry and achieve continuous compounding of your funds – regardless of whatever is taking place in the market – at a pace never previously available to investors.
Why not put the exceptional performance of the ETFOptimize strategies to work for you?
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The ETFOptimize quantitative investment strategies have a proven track record of consistently high-performance success over long periods. Our premium model strategies have provided an average annual return of 30.53% since their inception – which is a multiple of more than quadruple (415%) the long-term annual return of the S&P 500, and more than eight times more than the index' return since 2000. The ETFOptimize strategies, collectively, have beaten the S&P 500 in 63 of 66 years (95.5%)!
The ETFOptimize strategies operate using our proprietary, quantitative financial-analysis programming that has been continuously upgraded and refined over the last 25 years, accompanied by high-speed computer servers and high-quality, point-in-time investment and economic databases. As ETFs were developed and became so incredibly popular, we've adapted our approach to embrace these instantly-diversified products.
Why not look over our strategy lineup now and see which one is the best fit for you? It's actually straightforward and affordable to put a high-performance investment strategy to work for you every week of the year. The ETFOptimize models are available by subscription starting at just $14/mo.
(We even offer a Free strategy for those who would like a long-term trial before subscribing).
Look around the Internet; we don't think you'll find a superior approach to investing – offered at such an exceptionally low cost, and making consistent, high-performance investment results affordable for even the smallest investor. You keep your money in your account and follow our clear instructions for trades, which occur only about three times per year. We provide you with weekly updates of your strategy and an analysis of the market that always tells you what's critically important.
Plus, you can subscribe without risk because each model is backed by a 60-day, 100% Moneyback Guarantee if you decide that algorithmically based strategies are not your cup of tea. Our firm, Optimized Investments, Inc., has an A+ Rating with the Better Business Bureau and a perfect record of satisfied customers – no complaints – since the BBB began reviewing our firm, which was founded in 1998.
Take a moment to sign up for the strategy of your choice now – while all the benefits of a quantitative approach are fresh in your mind. You can get started for less than 50-cents a day with a very low-risk, high-profit investment strategy that produces solid performance through thick and thin – in any type of market environment.
Moreover, remember that you have nothing to lose – if you change your mind anytime in the first two months – for any reason (or no reason at all) – just let us know and we'll return every penny you paid! Visit our ETF Investment Strategy Suite today and select the quantitative strategy that's perfect for you:
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Note: If you have any questions about the ETFOptimize Premium Investment Strategies or our measures of performance, please contact us at your convenience.
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