A hybrid strategy that combines a static buy-and-hold approach with a dynamic investment that alternates between stocks and bonds.
This is a hybrid strategy that combines a static buy-and-hold total market exposure with a dynamic stock and bond allocation. The model will either be allocated 80% stocks/20% bonds OR 30% stocks/70% bonds depending upon the current asset-class trend.
This strategy offers a solution to investors who want to maintain some constant exposure to the market while at the same time protecting their capital from large market losses.
The model is rebalanced quarterly.
Sharpe Ratio – the average return earned in excess of the risk-free rate. A higher Sharpe Ration is better
Risk-Free Rate – represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time.
Sortino Ratio – another measure of risk that takes into account the downside deviation of the asset. A higher Sortino Ratio is better.
What is Drawdown?
Drawdown is the measure from the highest high to the lowest low or peak to trough during a specific time period. It is an important measurement of risk. A larger drawdown requires a more significant increase in the security to recover.
Volatility measures the change in the price of an investment. The higher the volatility, the higher the difference between the high and the low of an investment’s price.
The 12 Month Rolling ROR is the compound rate of return for the last 12 months. The rate of return is the gain or loss on an investment over a specified time period, expressed as a percentage of the investment’s cost.