Buy the best ETFs every month.
Outperform the market
with battle-tested algorithms.
Get an email at the end of the month and make a few trades.
That’s all it takes.
Hit your number quicker
Our algorithms went live in 2017 and have returned 20% to 35% annually.
Historically, the S&P 500 has averaged ~7%/year.
Smaller drawdowns
The model experiences drawdowns like any other investment strategy but they haven’t been quite as deep as the market.
“I felt like Goldilocks wanting something in between day trading and buy and hold. Super glad to have finally found a system fits my schedule.”
— John B, subscriber since 2018
Similar volatility
Core Momentum has an annual vol of 25% vs 24% for the Nasdaq (QQQ).
If you’re comfortable with equity-like risk, why not aim a little higher?
Monthly returns of S&P 500 vs Max Aggressive strategy
Zero correlation
The R squared for our models is 0.03.
This means there’s virtually no correlation with market performance.
If the market goes down, the algorithm could go up or sideways or down.
High returns + zero correlation = amazing diversification for your portfolio.
In his book “Holy Grail of Investing”, billionaire investor Ray Dalio showed how adding 1 uncorrelated asset to a portfolio can reduce risk exposure by 29%.
Get an email at the end of the month and make a few trades. That’s it.
How it works
At the end of every month, our algorithm evaluates several equity and fixed income ETFs.
It calculates a unique 'momentum score' for each ETF based on performance and then ranks them from best to worst. 'Best' being the asset class with the highest positive momentum and highest probability to outperform in the near future.
The portfolio is split evenly between the top ranked ETFs and held for the whole month.
By subscribing, you’ll get an email on the last trading day of the month telling you exactly which ETFs (1-3) to hold for the upcoming month.
Our approach
We use a quantitative model based on tactical asset allocation, a type of investment strategy designed to buy assets that are trending higher.
Our unique algorithm determines the best assets from a set of globally-diversified, low-cost index funds.
Investment decisions are determined by the algorithm and not any human judgement.
Key metrics
Over the past 100 years, US equities have averaged around 7-10% a year.
Since 2000, the average has been towards the lower end.
Even if the S&P 500 were to revert to its higher historical average, our systems would likely outperform by a wide margin.
With about the same volatility but only a fraction of the maximum drawdown.
Compared to a buy-and-hold strategy, our systems would've made around 1,200% to 3,600% more than the S&P 500 - all without the gut-wrenching drawdowns.
Historical allocations
The pie chart shows the percentage of time each asset class has been allocated to (multiple ETFs are often held at the same time).
You can see the distribution is fairly equal meaning that a single asset class doesn’t account for all the performance.
Having a diversified group of ETFs to choose from allows us to capture momentum wherever it is.
See historical positions here.
Stop drawing lines on charts. Start winning.
Avoiding recessions
Since 2000, the worst drawdowns our strategies experienced were around -20% (on a month-to-month basis).
During the same time period, the S&P 500 had two major drawdowns losing around 50% each time.
When markets trend down - why stick around if you don’t have to?
“The market always comes back.”
Maybe. But do you have time to wait years/decades to get back to breakeven?
If you’re near or in retirement and lose half your portfolio, your budget will quickly go from catamaran to cat food.
Here’s a screenshot of our signal for February 2020 - one of the algorithm’s best calls in 2020 was avoiding the coronavirus meltdown.
The market tanked 30% in a few weeks. What would you pay to have avoided that?
Future growth
One question we get asked is if the models will continue to work in the future. We think so for a few reasons:
1. They survived 2 major recessions and outperformed for nearly 20 years during a wide variety of market environments.
2. The algorithms are very general. Meaning they don’t “overfit” the data during a specific time period to get better results.
3. We use a globally-diverse basket of ETFs which helps spread out the risk if one asset class underperforms for years.
4. Like other types of investing factors (e.g. value, size, quality, low volatility), momentum investing has been empirically shown to capture long-term risk premium.
5. Since going live in 2017, the models have successfully avoided big market drops like the Volpocalypse (Feb 2018), trade war escalations (Oct - Dec 2018), and the coronavirus pandemic (March 2020). This is more evidence that the algorithms are actually robust and not just curve-fitted to look good during the backtest.
Inflation is melting your money.
Your money is worth less and less each year.
Your only option: Make more money.
Is your portfolio keeping up?
In your portfolio
What would this look like in your current portfolio?
Here’s a 60/40 portfolio (60% stocks, 40% bonds) vs a 50/40/10 portfolio (50% stocks, 40% bonds, 10% Core Momentum).
Just a small allocation has a massive impact over time.
You may be thinking “Why not just allocate everything to one of these strategies?”
The main reason is: the models are almost entirely uncorrelated with the market (R Squared = 0.03). This means only about 2% of the models’ movement can be explained by movements in the S&P. (The markets going up doesn’t necessarily mean the models will also go up).
This is great for portfolio diversification but means that some months the models could be in cash while the market is headed higher.
If only 10% of your portfolio is in cash (for example), then you have much less fear of missing out if the market goes up.
When a strategy underperforms, investors have a tendency to jump ship and try something new, usually at the worst possible time because it’s a temporary blip.
The goal is to stay the course.
So how should you use this (or any other alternative/tactical/trend following strategy)?
Most people replace a small percentage of their equity position and let that tactical allocation tilt their portfolio bullish or bearish depending on the market environment.
Being long equities has historically been one of the greatest wealth generators in the world.
Sometimes, though, it’s prudent to take your foot off the gas and allocate more towards cash and bonds.
Use a system and stop guessing.