Objective: Outperform the S&P 500 index in bull market cycles and generate a positive return in bear market cycles.
Generate capital growth greater than the S&P 500
Use strong up-trending stocks in Bull markets
Use inverse ETF's in Bear markets
How It Is Done
By investing in strong up-trending stocks in bull markets, and inverse ETF's in bear markets we position this strategy to beat the market in Bull and Bear cycles.
How do we minimize risk
To minimize risk in the Tactical Growth Strategy we pay close attention to what the market is telling us, and we are not afraid to go to cash during transition markets.
Historically our drawdowns at any given time in this model has been between 5%-6%.
Above all else, the model is data-driven. It relies on historical data and not forecasts or guesses or future estimates of market conditions.
The model is designed to hold strong, up-trending stocks that have above market pricing trends in bull markets; hold more cash in transition markets; and, hold major index inverse (1x) ETFs in bear markets.
The model is limited by sector or industry diversification. This means the model will not invest more than 30% into any one sector and no more than 20% into any one industry. This does NOT mean the model is "diversified" in the strict sense of the portfolio definition of diversified. But, it does mean the model does limit its exposure to sectors and industries such that it does not become too overloaded in one or more segments of the economic market.
The model does not compare value to growth, within equity selection. The model focuses on holding equities with the strongest fundamentals that are producing the strongest up-trending pricing growth.
In bull-trending markets, the model's investment goal is to be fully invested in up to 30 fundamentally strong, strongly up-trending stocks, with a capital allocation of 3.3% in each holding.
In Neutral markets, the model will not be buying any bull-trending equities and will not be buying any bull-trending inverse ETFs.
In bear-trending markets, the model's investment goal is to be fully invested in up to 4 index (S&P 500, Nasdaq, Russell 2000 and DJIA) inverse (1x) ETFs. Allocation of capital among the 4 indexes is not pre-determined, but will fluctuate with more capital invested in the stronger trending indexes.