A rules-based model tactically adjusts your equity-to-bond exposure to reflect the equity market reward-to-risk ratio as measured by our proprietary oscillator.

 

We offer a range of model portfolios using this oscillator, which based on historical testing, delivered superior return metrics versus their respective benchmarks.

This solution is available to self-directed individual investors via subscription to our model portfolios signal delivery service. Implementation is easy.

The basic concept is that the market generally tells you what it is thinking about the reward-to-risk ratio - if you know where to look - and we capture that in a single oscillator.

How it works

The model is based purely on analyzing market internals, i.e. price action within multiple sectors in the market, which we have distilled into a single oscillator which represents our interpretation of the reward-to-risk ratio inherent in the equity market.

 

 

Understanding the oscillator is simple. The blue zone in the middle is the neutral zone. Above the neutral zone is a favorable reward-to-risk environment for equities and below the neutral zone is an unfavorable reward-to-risk ratio for equities. There has been a strong and sequential relationship between the strength of the oscillator and 1-to-3 month forward returns to the market; a favorable reward-to-risk ratio is associated with positive returns and an unfavorable reward-to-risk ratio is associated with negative returns.

 

The model does not require any valuation or macroeconomic variables as inputs, nor does it employ trend following, momentum or any type of technical analysis or pattern recognition strategy. The model has very few variable inputs and the strategies are robust to changes in the variables.

 

We believe this proprietary process is an innovative approach to using price action to derive an investment fundamental. 

 

Designing strategies based on the position of the oscillator perform significantly better than their benchmarks on all metrics when tested on historical data going back 20 years. We offer a variety of model portfolios for investors who are generally in a 60/40 type passive balanced allocation and wish to add a tactical tilt to try and enhance their performance. The primary difference bewteen the models is in the aggressiveness of the equity tilt - they range from conservative to very aggressive. Some of the models are total portfolio solutions and some are intended as a carve-out sleeve of your core portfolio.

 

 

Model 1
Total Portfolio Solution
60/40 Baseline
Aggressive Tilt
ETFs used: SPY; IEF
Benchmark: VBINX
Model 2
Total Portfolio Solution
60/40 Baseline
Moderate Tilt
ETFs used: SPY; IEF
Benchmark: VBINX
Model 3
Total Portfolio Solution
60/40 Baseline
Conservative Tilt
ETFs used: SPY; IEF
Benchmark: VBINX
Model 4
Carve-Out Solution
50/50 Baseline
Aggressive Tilt
ETFs used: SPY; IEF
Benchmark: 50/50
Model 5
Carve-Out Solution
S&P 500 Baseline
Aggressive Long-Short Tilt
ETFs used: SPY; IEF
Benchmark: SPY
To learn more about the oscillator and our model portfolios, including back test performance, please request our white paper below.

Request our White Paper

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The white paper is being finalized and will be available in a few days. We will email to you as soon as available. Thank you for your patience!

 

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Easily visualize how much you will need to save to achieve the retirement income you desire.

We hope you find this exercise valuable.

What you receive when subscribing

Your annual subscription will include the following deliverables:

  1. Model Rebalance Alerts as generated by the model – daily if necessary. Alerts will be sent out each night if there is a change required to be implemented on the following trading day. Download our rebalance calculator to make your life simpler. (View sample report).
  2. Bi-Monthly Oscillator Status Report plus a summary Y-T-D performance report for all models - (24 reports). (View sample report).
  3. Semi-Annual Performance Assessment Report - (2 reports).

Visit our FAQs for some commonly asked questions around implementiation

 

Rebalancing made easy

Download our simple Rebalance Calculator spreadsheet to easily calculate the number of shares to buy and sell at each rebalance event.

Subscriptions

Subscription to our model portfolio suite is available now to individual investors for an introductory annual rate of $199. Subscribe before March 31, 2020 and we will lock this rate in for ten years.

For investment professionals (investment advisor, wealth manager, asset manager) the annual rate is $999. We can also design a custom model upon request.

 

A message from the product developer

Hello, my name is Jonathan Selsick. I am the developer of the research behind these model portfolios. This product is the culmination of ten years of studying and modeling how the market behaves. I sincerely hope that it will help deliver positive outcomes in your portfolio.

Given that is is a new product, we are committing to lock-in the annual subscription rate for early adopters who subscribe before March 31, 2020.

Thank you for your interest!