Improve the Traditional Buy-and-Hold Strategy

The index’s model follows a two-step process. The first step measures trend following and mean reversion within the S&P 500 industry groupings to determine a bullish or bearish market environment. Additionally, the model applies a risk filter process to ensure that all of the price-based industry level indicators are effective over time.

The second step calculates the scores taken from the first phase to produce the equity allocations of the index. When the index is not completely long or flat, either 80% or 40% of the portfolio will be allocated to the S&P 500, with the remainder allocated to the Solactive 13-week U.S. T-bill Index.

While investors may buy-and-hold various asset categories to diversify risk in case of a market pullback, a diversified portfolio may still ride the fall-out. Alternatively, investors can consider this long-flat ETF strategy as a way to directly limit against downside risk or generate improved long-term, risk-adjusted returns.

Financial advisors who are interested in learning more about a long-term investing strategy can register for the Wednesday, December 6 webcast here.