Our research shows that virtually all stock market declines of significance are preceded by periods of negative, more moderate price decreases. This preliminary period allows our system to attempt to exit markets in the early stages of declines, prior to significant moves lower.
During rising periods, our objective is to remain fully invested, and attempt to track a particular index being managed. Once our algorithm detects that markets have begun to move lower, and confirms a sale, we exit the underlying securities and hold assets in treasuries or other money market instruments. When out of the markets we expect to track money market returns. Once our algorithm detects that markets have begun to move higher, our system re-enters the market, potentially capitalizing on any move higher.
We are unique in our space for operating solely “price reactive” models to control risk. We acknowledge and act on trends rather than challenging them. For advisors, that means minimal “black box risk.” It also means that our system has been reliable at participating in big moves higher as well as avoiding losses.