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The information on this page was most recently updated on:
Sunday, June 23, 2019
Strategies are updated each week by 12-noon (EST) on Sunday. We will announce any unexpected delays.
Trades should be filled at mid-day on Monday (Tuesday if Monday is a holiday).
Prices on new trades are now updated in the evening after a trade (usually on Mondays).
This Strategy Profile (preview) page provides you with an introduction to our Adaptive Equity-Plus (2 ETF) Strategy (abbreviated as "Equity+") and a preview of its many features and benefits. Below you'll find comprehensive data and detail charts showing this quantitative strategy's historical and recent performance, its robust performance during the Financial Crisis, information documenting its exceptionally high Risk-Adjusted Return, and a clear accounting of the significant benefits that accrue to an investor by using this investment model's systematic guidance.
Here's a chart of the performance of the Adaptive Equity+ (2 ETF) Strategy since inception. Notice the consistent and accelerating performance in the top window, and a very low Max Drawdown (lower window) that has no exceptional events:
The blue line shown as the benchmark is a buy-and-hold of the S&P 500 Index.
The red line is the ADAPTIVE EQUITY+ (2 ETF) STRATEGY performance since inception.
You can see by the long-term chart above that the Adaptive Equity+ (2 ETF) Strategy will provide you with steady, consistent gains through all market conditions. Whether conditions for stocks are bullish, bearish, or sideways, this strategy produces continuous performance and an Annual Return of about 38%. Average Maximum Drawdowns are only about -14% each year (lower window).
Our Strategy Profile (preview) pages provide investors with a preview of the actual performance of our Premium Strategies that is updated weekly. Many of the charts and tables in this Profile page are a duplicate of the same tables and charts you will find in your Premium Strategy (subscription) page after you register. After registering for the Premium (subscription) Strategy for this model, you'll get full details of Current Holdings, Closed Positions, and recent Transaction information – and regular updates of our award-winning market and investing research.
Click here to register for this model and begin getting these consistent gains today – without the psyche-devastating losses that can destroy your portfolio for years afterwards (the 2008-2009 Financial Crisis required .
With an Annualized Return of 38% for the Adaptive Equity+ Rotation (2 ETF) Strategy, this model produces a total profit that is more than quadruple the 8.39% Annualized Return for a buy-and-hold of the SPDR S&P 500 ETF (SPY) during the same time period (since July 1, 2006). Since its inception, the Adaptive Equity+ Rotation (2 ETF) Strategy has been profitable 100% of the time - 13 of 13 years.
Combined with very low average annual Maximum Drawdown of just -14%, the Equity+ Strategy has a
Risk Adjusted Return (Sortino) of 2.36!
For a limited-time only, we are offering this strategy at the introductory price of just $24/mo or $240/yr.
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Why not register now and put this exciting investment model to work for you today? Choose either monthly at the introductory price of just $24 – or get an additional month free by registering for the 1-year subscription at just $240 – we think you'll agree it's money spent prudently, a product that easily pays for itself every year. Always remember, your subscription is backed by our 100%, 60-day Money-back Guarantee so you have ZERO risk to get started now.
If you have any questions about this – or any of our other strategies, please contact us for prompt assistance.
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Note: Since the chart on this page are not logarithmic, recent volatility will appear more significant than past volatility – even if it is actually less in percentage terms. See the detailed performance charts below for further details.
The Adaptive Equity+ Rotation (2 ETF) Strategy provides subscribers with an alternative to buying-and-holding the an Equity ETF or descretionary stock selection that achieves far superior performance with a total return that since inception is five-times (513%) more than the return of its benchmark, the Vanguard Total Stock market ETF (VTI).
In addition to its far higher performance, this strategy accomplishes those gains with lower risk and attains an exceptionally high Risk-Adjusted Return (RAR). The Equity+ Strategy has a Sharpe Ratio of 1.50 and Sortino Ratio of 2.36 (compared to 0.60 and 0.77, respectively, for the S&P 500), with no money-losing years since its inception. The strategy also outperforms its Total Stock Market benchmark (VTI) and the S&P 500 ETF (SPY) every year since inception.
May 27, 2019 REVISION: The Adaptive Equity+ (2 ETF) Strategy improves on our original "Equity Rotation (2 ETF) Strategy" with two innovative improvements:
1) This version (R2) of this model utilizes a new universe, dubbed the "Equities+ Universe (R1)" that includes 1,073 carefully-vetted equity ETFs – compared to just 213 equity ETFs in the previous version of this strategy.
2) This revision of the model employs different measures depending on whether we are in the Summer season or the Winter season. That's because our researchers have discovered there are legitimate differences between each season that call for disparate Buy, Sell and Exposure rules for each period.
Most investors have heard of the investing trope, "Sell in May and go away (until Halloween)," which reflects the natural yearly business cycle. The annual investment environment is driven by people taking holidays throughout the summer and then return for work in earnest in the fall.
Because of this seasonal difference and the resulting changes in trade volume and market volatility, the business environment can't be accurately evaluated during the summer months, leading to increased volatility – and economic numbers (employment, GDP, retail sales, and others) don't firm up until late-October.
For these reasons, we have found that the summer and winter portions of the year deserve a separate set of assessments of macroeconomic, fundamental and technical criteria, thereby determining the optimum exposure level to the market in both parts of the year. Combined with a quadrupling of the number of ETFs from which we can select and two distinct universe sets for each season, these two changes make for an enormous difference in robustness and performance of this equity-based strategy.
ROTATIONAL SYSTEM: The Adaptive Equity+ (2 ETF) Strategy attains outperformance by using low-volatility leveraged positions during expansionary (bullish) periods, using defensive equity ETFs (such as Staples or Utilities ETFs) when conditions slow, and using Cash-Equivalent ETFs (such as SHY or BIL) during contractionary (bearish) periods. By rotating to the most appropriate ETF group that provides the greatest performance as the business cycle progresses through its phases, the Adaptive Equity+ Strategy achieves the title of our best-performing model!
PERFORMANCE: The result is that the Adaptive Equity+ Rotation (2 ETF) Strategy generates a very steady Average Annualized Return (AR) of about 37% per year, with an Average Annualized Max Drawdown (AAMDD) of just -15%. The strategy has an average of 61% winning trades since 2006.
Our abbreviated name for this strategy is EQUITY+.
Last update: June 2, 2019
Inception: July 1, 2006
Rebalance Frequency: Weekly
Weighting: 50% in 2 Equity-based ETFs or hedge with Cash-Proxy ETFs (SHY, BIL)
Nearest Benchmark: SPDR S&P 500 ETF Trust (SPY)
PERFORMANCE (Higher is better)
Total Return since Inception (2006): 5,601%
Strategy Annualized Return (avg. per year since 2006): 37%
Benchmark (VTI) Total Return since 2006: 187%
Benchmark (VTI) Annualized Return since 2006: 5.49%
Financial Crisis & Recovery Return: 539.59% (see "Financial Crisis Performance' below)
Percentage of Winning Trades: 61%
Biggest Winner / Biggest Loser: 40.12% / -31%
Winning Trades Held for an average of: 38.15 days
Losing Trades Held for an average of: 26.93 days
Average Position Hold Time (all): 33.73 days (about 1.69 months)
RISK (Lower is better)
Strategy's Number of Money-Losing Years: 0 of 13 = ZERO
Strategy's Number of Years Outperforming the Benchmark (SPY): 13 of 13 (100%)
Strategy's Number of Years Outperforming S&P 500 (SPY): 13 of 13 (100%)
Strategy's Average Annual Max Drawdown** (AAMDD): -14.36%
Benchmark's (SPY) AAMDD**: -14.34%
Benchmark's (SPY) Max Drawdown: -56%
Strategy's Standard Deviation: 22.57%
Strategy's Annualized Alpha (outperformance of benchmark): 32.51%
RISK-ADJUSTED RETURN (Higher is better)
Sharpe Ratio - Since Inception: 1.50 (Compare to Benchmark at 0.60)
Sharpe Ratio - Last 3 Yrs: 2.22 (Compare to Benchmark at 1.14)
Sortino Ratio - Since Inception: 2.36 (Compare to Benchmark at 0.77)
Sortino Ratio - Last 3 Yrs: 3.18 (Compare to Benchmark at 1.42)
(Our abbreviated name for this strategy is "EQUITY+")
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For all data above: *Past performance is not necessarily indicative of future returns. **Average Annual Max Drawdown (AAMDD) is the average of the worst peak-to-trough drawdowns each year since inception, which we believe is the best representation of the worst declines you might experience as a subscriber in any given year. We also provide the Maximum Drawdown (MDD) figures, which are the very worst drawdown instance that has occurred since inception.
A smooth, steadily climbing performance chart: As you can see from this chart that runs from the strategy's inception on July 1, 2006 to present, the Adaptive Equity+ Strategy provides a steady and consistent, upward ascent of its equity curve. The Adaptive Equity+ Strategy consistently identifies the market's regime – whether economic conditions are in expansion or contraction – and determines the most appropriate set of two Equity ETFs – or Cash-Proxy ETFs during contractions – for current conditions. This continuous assessment of conditions and rotation of positions keeps your investment funds growing month after month, year after year.
With a compound annual growth rate of about 37%, this easy-to-use, 2-ETF strategy outperforms (631%-times) the average return of its benchmark (the Vanguard Total Stock Market ETF, VTI), and according to data provided by Morningstar, outperforms 100% of mutual funds in the last 3, 5, 10, and 20 year periods. Since inception on July 1, 2006, the Equity+ Strategy has outperformed its benchmark every year since inception and has NEVER EXPERIENCED A MONEY-LOSING YEAR.
The Adaptive Equity+ Strategy's performance is shown by the red line while its benchmark, the Vanguard Total Stock Market ETF (VTI), is represented by the blue line.
KEY: The blue line shown as the benchmark is a buy-and-hold of the Vanguard Total Stock Market ETF (VTI).
The red line shows the ADAPTIVE EQUITY+ (2 ETF) STRATEGY performance since inception.
Note: The charts on this page are not logarithmic and recent volatility in the top (% Return) graph will appear greater than past volatility, even if it is less in percentage terms. To accurately compare recent volatility to past volatility, please see the lower-half (% Drawdown) of each 2-part graph.
KEY: The blue line shown as the benchmark is a buy-and-hold of the Vanguard Total Stock Market ETF (VTI).
The red line shows the ADAPTIVE EQUITY+ (2 ETF) STRATEGY performance since inception.
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CALENDAR YEAR PERFORMANCE – BAR CHART
Yearly Performance Bar Chart: This chart tracks each strategy's performance for each calendar year since inception. You can see in the chart below that the performance of the Adaptive Equity+ Strategy (red bars) has been profitable every year (indicated by red bars being above 0%), and in 13 of 13 years, the strategy (red bars) outperformed its S&P 500 benchmark (indicated by the strategy's red bars extending above the benchmark's blue bars).
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This table shows the Adaptive Equity+ Strategy Strategy's trade-statistic record since inception.
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One of the most important measures of the effectiveness of an investment approach is its
Risk-Adjusted Return, commonly measured by the Sharpe Ratio or Sortino Ratio. These metrics show the ratio of an investment's performance to its volatility. The Sharpe Ratio measures performance against all volatility, while the Sortino Ratio measure performance against downside volatility only. Investors are prone to making emotionally based, injurious decisions when volatility gets high, so the industry has labeled this factor as 'risk.' A strategy with a high Risk-Adjusted Return is one that provides excellent upside performance with low volatility.
Notice the dramatic outperformance of this strategy when
those two ratios are compared to the strategy's benchmark - a buy-and-hold of the Vanguard Total Bond Market ETF (VTI). Since the inception of this strategy, the Sharp Ratio of VTI is 0.60 while its Sortino Ratio is 0.77 – compared to an exceptional Sharpe ratio of 1.50 and Sortino Ratio of 2.36, respectively, for the Adaptive Equity+ Strategy.
You can also see from the last entry on the bottom-right side of the table showing Alpha % (average annual outperformance of a portfolio compared to the performance of its benchmark) that this strategy outperforms its benchmark by an average of more than 30% per year! The actual, year-by-year outperformance is shown in the "Performance Stats - Yearly" table (above).
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STEADY PROFITS: By combining two equity-based ETFs, the Adaptive Equity+ (2 ETF) Strategy provides low-volatility, consistent outperformance regardless of market conditions, accompanied by vastly reduced drawdowns. With an Annual Return of about 38%, an average annual Maximum Drawdown of just -14%, the Adaptive Equity-Plus Strategy rewards users with consistent, continuous positive returns.
HIGH RISK-ADJUSTED RETURN (RAR): The Adaptive Equity+ Strategy's Sortino Ratio of 2.36 since inception is one of the highest of all our strategies, and it has an even higher Risk-Adjusted Return of 3.18 in the last three, quite volatile years! We generally use theSortino Ratio as an indicator of Risk-Adjusted Return, because it measures the ratio of strategy's upside appreciation to its downside volatility – which is the risk factor about which nearly all investors are most concerned.
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ROBUST GAINS DURING BOTH RALLIES AND DOWNTURNS: The combination of two equity ETFs – i.e., the optimum selection from a universe of 1,073 well-vetted equity ETFs – provides you with performance that is double the return of the market during bull rallies, while producing gains during market downturns. The Adaptive Equity+ Strategy produced a return of 540% during the Financial Crisis and its recovery – during a span that the S&P 500 produced return of 0% – that's 4-1/2 long years that the average investor had no appreciation of their savings – dead money. Yet the Equity+ Strategy provided an average Annualized Return of 40% at a time when the S&P 500 was experiencing and recovering from a -56% drawdown!
With the latest revision, when significant market declines occur, this strategy offers a powerful defense by switching to a pair of high-volume, short-term Treasury ETFs (SHY and BIL) that serve as proxies for cash. During the volatile summer months when market volume significantly declines, this strategy switches away from more aggressive and leveraged ETFs to a conservative set of equity ETFs. This approach reduces the strategy's volatility and provides lower annual drawdowns at a time when the market is prone to low-volume swoons. The Equity-Plus Strategy provides investors with an approach that can profit no matter which direction the market is headed – always with a smooth, upward trajectory.
UNEMOTIONAL, EFFICIENT INVESTMENT DECISIONS: Using an unemotional, mathematically driven trading system enables you to ignore the financial media, with its click-bait pessimistic market outlooks, coffee-amped TV talking heads, and hype-reliant internet shysters who attempt to lure you into their capricious agendas that surreptitiously hijack your wallet. Instead, your weekly ETFOptimize Strategy Update will quietly provide you with the accurate intelligence you need, with detailed documentation of trades when they should occur, details of your strategy's performance for the last week, month, year, and since inception.
You get a comprehensive set of performance, trade and risk statistics so you can quickly check your progress toward achieving your financial goals. Subscribers can sleep soundly know that their strategy is always selecting the optimum positions for conditions and perhaps most advantageous of all – knowing that by design, there is little risk of losing money in any given year.
EASY TO USE: The ETFOptimize investment strategies minimize the number of trades needed to attain their high performance, with an average of 3.83 months between trades. The Equity+ is Strategy is our most aggressive model and trades a bit more often, with an average hold time of 33.73 market sessions (about 1.7 months). When a transaction occurs, you receive straightforward details for trades that you can quickly execute with the click of a button at your broker's website. For investors who want to become familiar with each position, we provide a link to complete background data and relevant news for each ETF selected for use by the strategy.
Each of the ETFs in the universes from which our models select has been carefully reviewed for tradability, with a rating of 5 out of 5 from FactSet for an investor's ease of trading a $1 million block. ETFs don't trade like stocks, and you should avoid looking at the daily volume for guidance on an ETF's tradeability. What matters most is the volume of the underlying stocks in the index upon which the ETF is based. The ETFs in our universes have ample underlying volume in their constituent's stocks, and you should never have a problem when making trades of $1 million or less.
The ETFOptimize strategies are unquestionably a breakthrough in the investment world – providing what legitimately may be the easiest way to attain substantial wealth through consistent compounding – and with minimal risk. For investors, this can be the "Holy Grail" – a simple, proven investment approach that produces gains through both bull markets and bear markets alike.
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1) High-Performance Model w/ Weekly Updates – By Noon every Sunday, your Premium Strategy Page is updated with your model's freshly revised details, including details of any New Trades, updated prices and performance for current holdings, past transaction documentation, current and historical performance charts, and complete trade and risk statistics. Having the latest performance information keeps you abreast of the profits you're accumulating toward achieving your financial goals! And you'll get much more...
2) Strategy Trade Alerts – With each weekly update you will receive a Strategy Update Summary email with any Strategy Trade Notices for that week, including the complete details of any trades recommended by your quantitative model, including links
from each of your model's current holdings to historical prices, a wide variety of statistics, charts, and news related to that ETF and its industry. We recommend that you fill ETF transactions in the middle of the following day (Monday – or Tuesday if Monday is a holiday). Note: Across our strategies, the average trade hold time is about 2 months, so trades are relatively rare events, but those few trades are enough to make a world of difference!
3) 'Quick Look' Report – Whenever there is a big change coming for the market, your Strategy Update Summary email will include the link to our latest fact-filled "Quick Look" report that provides you with an Executive Summary of the factors and events most likely to affect investment prices in the coming week. This includes the current status of economic data, critical technical support and resistance levels, substantive changes to fundamental indicators, scheduled news events and announcements that are sure to have an outsized effect on stock and bond prices. With your weekly Quick Look report, you'll gain insights into little-known factors affecting your investments, and you'll know beforehand what to expect in the week ahead.
4) 'Insights™ - the Systematic Investing Resource' – Premium-strategy subscribers get first access to our award-winning Insights™ data-driven Insights™ market reports as soon as they are released – well ahead of the public and media outlets that cover us. Since 1998, thousands of individual investors and advisors have come to depend on the premium quantitative assessment in our weekly market reports, and you'll get that information days before non-subscribers or media outlets have an opportunity for access. Discover the Insights™ our proprietary indicators can reveal about macroeconomic measures, fundamental stock factors, market-internal breadth indicators, and sophisticated technical signals, always accompanied by clear, explanatory charts.
5) 'Inside Secrets of Investing' Blog – When we post a timely analysis or news-worth article to our Inside Secrets of Investing Blog, premium-strategy subscribers get the first available access to that valuable information another section of the site where it's publicly available. The 'Inside Secrets of Investing' blog features a wide variety of resources, from equity, fixed income, and sector analysis, to macroeconomic and fundamental analysis, ETF-related subjects, evergreen investment articles, and experienced-insider tips that help you attain phenomenal investment performance.
6) Perhaps Most Importantly – You'll get the potentially life-changing benefit of consistent and exceptional compound growth of your investment dollars without the stress and corrosive worry about a potential loss of your capital that accompanies most other investment approaches.
An average Sharpe ratio of 1.50 and an average Sortino Ratio of 2.21 consistently rank our strategies atop the lists of highest risk-adjusted return of any mutual fund, professionally managed portfolio, or quantitative investment models of which we are aware.
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Since 2004, Optimized Investments, Inc. has held an A+ Rating with the Better Business Bureau and has never had a single complaint since the company's launch in 1998. Our corporate mission is to create a tremendous group of enthusiastic customer-advocates who consistently achieve their wealth-building goals using the ETFOptimize investment strategies. Why not join the thousands who have already taken advantage of these unique strategies? You have zero risk – the burden is entirely on us to provide you with the performance, features, and benefits discussed on this page.
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