Review 1997 - today
If you want to invest your capital profitably in the long term, you can hardly avoid the stock market.
The global stock markets not only offer good profit opportunities, but also have some potholes in store. If you not only want to invest your capital, but also protect it, you need a suitable investment strategy.
The ETF Portfolio Strategy offers the possibility to integrate basic economic and momentum parameters as an investment strategy.
The strategy follows an asset and strategy rotation principle, which uses economic indicators and momentum factors.
The performance of the ETF Portfolio Strategy differs significantly from the global indices.
What are the reasons for the difference in performance?
Recession protection:
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The US SMO Economic Stress Indicator signals possible recessions.
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In the event of negative momentum in the stock indices and a signal from the US SMO Economic Stress Indicator, the asset classes are reallocated.
Diversification:
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Even in a recession, we rely on several asset classes. This ensures diversification even in difficult stock market phases.
Money Management:
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The ETF Portfolio Strategy regularly calculates the optimal weighting of the individual asset classes.
Performance & Drawdown Overview
The strategy is specialized in avoiding risks in the equity market. The investments are selected worldwide and focus on markets and assets that show positive growth.
The long-term outperformance of the global indices is a result of risk management.
Performance: Jan.1997 - 2021
Drawdowns: Jan.1997 - 2021
Drawdowns
The following chart shows why avoiding large price declines is so crucial.
A price loss of 50 percent requires a subsequent price increase of 100 percent to make up for the loss.
Generating high price increases is always a challenge and depends significantly on the performance of the broad equity market.
US SMO Economic Stress Indicator
The US SMO Economic Stress Indicator is an essential component of the ETF Portfolio Strategy.
Economic indicators analysis
The US SMO Economic Stress Indicator analyses the economic development on the stock market.
Not all signals are perfect. The important thing is that all major drawdowns can be signaled and avoided. This approach delivers the best performance over the long term.
The US SMO Economic Stress indicator is based on a multifactor approach that combines various components.
Multi-level big picture analysis:
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Economic indicators
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Business Cycle
Action at risk of recession:
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Reallocation of positions to assets that historically outperform during recessions.
