Resource Allocation Rotation

Presentation Transcript

Resource Allocation Rotation 10/13/09 By Don Wilson Web Site donsfunds.com

Stock Market Investing/Trading Started Investing 1987 Stocks w Fundamental Analysis 1993 Technical Analysis 1994 Built First Market Risk Management Model 1997 Trading Mutual Funds 2003 Automated Mutual Fund Trading "Tango5" 2004 Automated ETF Trading – "TangoETF"

ETF's & ETF Trading Systems ETF's all in all Managed Risk Models Some ETF exchanging frameworks Focus on ETF Asset Allocation Rotation

Managed Risk Stock Market a Dangerous Place Priority Number one is NOT PROFIT, it is MARKET RISK MANAGEMENT Using Risk Models we can gauge the real hazard in the market This permits us to maintain a strategic distance from huge loses amid those unsafe market times

Overcoming Losses • 35% misfortune requires a 74% pick up to make back the initial investment. • half misfortune requires a 100% pick up to equal the initial investment. • 75% misfortune requires a 400% pick up to earn back the original investment.

Example Russell2000 21 years The Power of Compounding Returns with Risk Management Black line is Russell2000 without Risk Management Red line is with Risk Management 1579% Greater Return with 38% less hazard

Managed Risk Continued SECOND PRIORITY is measuring the Alpha and Risk of individual ETF's Which gives us return per unit of hazard Using our ETF Risk Adjusted Ranking Models Then distinguish the absolute best ETF's to put resources into at any given time

(RSI 14 + Stochastic 13/21) partitioned by 2

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The ETF Advantage Diversification Transparency, Predictability Safety Liquidity Cost

Asset Classes More Asset Classes Main Benefit to ETF's If you can dream "it" up, you can make an ETF out of "it". Case Schiller Real Estate Index ETF Junk Bond Spread (here and there) ETF's Van Eck Files for First A-Shares China ETF Replicate Hedge Funds - IQ Hedge Multi-Strategy ETF, ticker QAI

Best Place to Find ETF's seekingalpha.com

Wisdom Tree CEW Emerging Market Currencies

Best Place to Find ETF's seekingalpha.com

Managed ETF's ?? Issue is revelation of stock bushel There are some Managed ETF's currently I would call them Semi Managed over Quarters not Actively Managed One in enrollment will be week by week, exposure after close on Friday Some in enlistment will be every day

Example of Excellent Managed Mutual Fund DFSCX Period 21 years, Bottom Chart utilizing Managed Model

TangoETF Aggressive w Inverse Option

TangoETF Inverse Option Bull/Bear Cycle roughly 4 years 3 year Bull Market, 1 year Bear Market Do not have any desire to go Long/Short in all business sectors We created Bull State/Bear State Signal So we just Short utilizing opposite assets in Bear State Market

Example ETF's in Aggressive Portfolio Mix Aerospace Internet Utilities Energy Materials Commodities Small Cap Indexes Mid Cap Indexes Emerging markets Europe Single Country Funds

Asset Allocation Isrealson Research

Isrealson's Asset Allocation 15% Drawdown for a long time until 43% Drawdown for 2008

Introducing: TangoETF Six Asset Class Rotation Model Large Cap Small Cap Foreign (International) Bonds Real Estate Commodities

Unique Approach to Asset Allocation Rotation & Risk Management Large Cap Small Cap International Bonds 10-40 ETF's Risk Adjusted Ranking 10-40 ETF's Risk Adjusted Ranking 10-40 ETF's Risk Adjusted Ranking 10-40 ETF's Risk Adjusted Ranking ETC. Huge Cap Risk Management Small Cap Risk Management International Risk Management Bond Risk Management

Measuring Market Risk Market Risk Always Moving - Up ? Down ? Resource Class Risk Level Developed Computer Models that Measures Asset Class Risk High - Reduce Market Exposure Draw a Line in the Sand Low - Increase Market Exposure

Families Needed for Each Asset Class Example Large Cap Family, ETF Funds

Example U S Bond Family, ETF Funds

Six Asset Class Equity Curves

Large Cap & Small Cap Equity Curves

Bond & Foreign Equity Curves

Real Estate & Commodity Equity Curves

Putting It All Together Tango Asset Allocation Rotation Annualized Return 19.69% Max Drawdown 8.79%

Putting It All Together Tango Asset Allocation Rotation 11/21/02 – 10/07/09, 7 years 19.69% Ann, 8.79% MDD, 1.55 Sharpe, 3.18% SD Correlation is to SPY

TangoETF Subscription Service Four Portfolio's Available Aggressive Moderate Conservative Endurance Asset Allocation Rotation will be accessible soon

TangoETF Subscription Service Automated ETF Trading System Each Portfolio holds three positions Subscriber gets email every night Emails - Trade Gains Each Position, Portfolio Daily Gain, Positions to Buy or Sell. Also, a Link to Portfolio Daily Update on Web Site Subscription $299.95 every year

TangoETF Subscription Service

401(k) Platform Available utilizing TangoETF Managed Risk

Questions Contact don@donsfunds.com Sunrise 401 (k) Advisor: Mike Hall 1-972-406-8491 Best Place to Find ETF's seekingalpha.com Another source IndexUniverse.com