It's About the Right Tools for the Job
The performance of cars and telephones has improved considerably since Modern Portfolio Theory (MPT) was developed in 1952. Yet MPT’s simplistic “diversify-and-rebalance” mantra remains dominant in the industry. Technology advances occur when additional underlying problems are identified and solved. Since the advent of MPT, we've come to know that (1) there is momentum in market data, (2) noise in market data disrupts the momentum signal and reduces the quality of investment choices, (3) there are known methods for reducing noise, (4) bear markets have a different character from bull markets, (5) AI tools can reduce hindsight bias, which improves investment selections and portfolio performance, and (6) risk is NOT a one-dimensional problem cured by a single dose of diversification. It’s a multidimensional problem, and passive diversification is only just the start.
SumGrowth Indexes are based on Temporal Portfolio Theory (TPT), a significant extension to MPT that additionally employs temporal (time-based) market data and the cross-disciplinary sciences of Matched Filter Theory, Differential Signal Processing, Adaptive Filtering, Fuzzy Logic, and others to achieve superior portfolio performance. These are the same tools that have enabled WiFi, USB, smartphones, digital TV, and remot Mars rovers to communicate so well.
"If you want different results, do not do the same things." Albert Einstein
Change the Game!
Momentum Paradigm Shift
While most Indexes focus on a slice of the market, such as sectors, factors, or themes, our indexes are complete, self-contained tactical portfolio management systems that evaluate dozens of ETFs each month seeking the best portfolio of the four things investors want most.
Own Leaders - Not Laggards
Sports bars prove that valid message reception depends on the noise level. Likewise, news events add disruptive noise to market data. Our advanced signal processing methods clarify momentum signals to produce more reliable Bull Market selections and Bear Market exits.
Short-Term Capital Gains Become a Pain in the Past!
EZ-Indexes often make short-term defensive and momentum trades. While tax-deferred IRA accounts were a game changer, NQ (taxable) accounts can also provide tax-deferred growth using ETF exchange-in-kind rules. It’s always better to actively trade an Index like EZ-MO than to annually trade an average basket of stocks.
Overview of How it All Works
AlphaDroid Portfolio Design Tool
AlphaDroid investment Strategies and Portfolios level the playing field with Wall Street by putting the power of award-winning, high-performance investment algorithms in your hands. Select from among our many readymade Models, or create and edit Strategies and Portfolios of your own design to better address specific client needs.
There are Too Many Trends
Which Trend is My Friend?
The performance of momentum investing depends on its proficiency in extracting trend signals from noisy market data. We employ the cross-disciplinary sciences of Matched Filter Theory and Differential Signal Processing – the same technologies that enable WiFi, USB, iPhones, and remotely controlled rovers on Mars to perform so well.
Overview of How StormGuard Works
StormGuard: Bull-Bear Indicator
Risk is not a trivial problem cured by an ordinary dose of diversification. Our research shows that the most proficient way to reduce risk is through “avoidance” – specifically, avoidance of laggards and bear markets. StormGuard assesses market risk using four key metrics: Price-trend, Market momentum, Value sentiment, and Market volatility.
The Value of a Bear Market Strategy
Defensive Bear Market Strategies
When our StormGuard market direction indicator signals that market conditions have become bearish, its integrated Bear Market Strategy automatically takes charge and substitutes a set of defensive fund candidates and selects a momentum leader from among their defensive candidates, such as bond, treasury, and commodity funds.
Two Guard Dogs are Better than One
Momentum Dual Defense
While StormGuard™ is the first line of defense when market momentum fails, TrendGuard™ acts as a second line of defense by further incorporating a Defensive Backstop Model to compete directly for momentum leadership with the Model Portfolio’s candidate funds in order to provide a performance floor if all of the candidate funds are performing poorly.
Merlyn.AI -- A Simplified Visual Demo
Merlyn.AI Genetic Algorithm Portfolios
Merlyn.AI employs genetic algorithms to evolve competing sets of ETF models from which momentum-leading ETFs are identified in a manner that eliminates hindsight selection bias, and our Forward-Walk Progressive-Tuning methodology adaptively tunes our momentum filters – all of which improve the selection of momentum leaders.
A Guided Tour of Temporal Portfolio Theory
Conquering the Seven Faces of Risk
Conquering the Seven Faces of Risk breaks new ground with its development of Temporal Portfolio Theory as a critically important extension to MPT. The new cross-disciplinary mathematics of electronic signal processing and problem segmentation clarify momentum signals and apply bear market strategies to their separate problem class. Risk avoidance is far superior to ordinary risk dilution.