We will be doing required maintenance work on the server Sunday at 5PM PST. It is a significant Windows security system update and may take a few hours to complete.
During that time the entire site will be unavailable. But we will be back in time for the night owls to strategize. :^)
Thanks for your patience, Scott Juds
Sector Rotation Investment Strategies A Service of SumGrowth Strategies®
LLC
Returns
Safety
Simplicity
Control
Examples
Please click the graphic slides or the text just above
for more on each topic.
Why
Taking Control Urgently Matters
Diversify and Rebalance? Why
Be Average?
The financial industry has hypnotized us
into believing diversification and
rebalancing is the only worthy investment
strategy. But diversification inherently
means owning a little bit of everything —
which is the formula for achieving precisely
average performance! Rebalancing further ensures
we
won't stray far from average. No other industry
proclaims average performance is the best
you can achieve. Fortunately, it's not true
here either.
Change the Game! To achieve a different result
requires a different approach. Price momentum has long been proven
the best predictor of future returns. Simply
by owning momentum leaders and avoiding
momentum laggards one can simultaneously
improve returns and reduce risk of loss. No
diversification compromise! SectorSurfer
further maximizes performance utilizing
digital signal processing theory and
automated strategy tuning.
An Extra 10%
Really Matters Before Retirement:
The
Nest
Egg Value chart
illustrates how an additional 10% annual
return compounds over 15 years to produce a
nest egg four times the value it would have
otherwise had. The earlier you start, the
greater the multiple. It really matters!
After
Retirement: The Nest Egg Annual Income
chart illustrates how portfolio return
affects the inflation-adjusted annual income
you can take, assuming a $100k
nest egg, 2.5% inflation, and 30 years of
retirement to fund. In the illustrated
example, investing in the S&P 500 would
likely allow an income of $14,000/yr.
However, earning an extra 10% increases it to
$36,000/year. Again, it really matters!
Additional Resources
• The Economist:
Momentum in Financial Markets.
A compilation of industry studies and
expert opinions.
What is True Sector Rotation?
The Trend is Your Friend
Trends and fads are an inherent part of
human character. It takes time for
information to spread, to be understood, and
to be acted on. This creates momentum.
Price
momentum is found in all capital
markets, including stocks, bonds,
treasuries, and currencies. By its very definition,
"trend" means that information from the recent
past tells you something about the near future.
SectorSurfer's trend analysis algorithms use modern digital
signal processing theory to optimally
extract trend signals from noisy market
data.
True Sector Rotation The
market cycle is tied to the economic cycle.
Each market sector performs best during a
portion of the economic cycle. If you think
of each market sector as a piston in your
investment engine, the smoothest, most
powerful ride will be achieved when each of
the major market sectors is represented in
your portfolio ... but only while each is
delivering its power stroke.
By owning only the top trend
leaders and avoiding trend laggards one can
simultaneously improve returns and reduce
risk of loss. That's True Sector Rotation!
Diversify and Rebalance? Diversification inherently yields
precisely average performance. Master investor Warren Buffet
instructs us:
"Wide diversification is only
required when investors do not understand
what they are doing.
Risk is About Losing Money!
The definition of risk depends on who you ask. The financial industry
uses
the coefficient
of variation (CV) to measure risk, which tells you how
wiggly the line on the chart is, but not the
probability of losing real money. Treating
both up and down-moves equally as risk is an
unfortunate consequence. Only down-moves
contribute to real loss. SectorSurfer's risk
measure is the
probability of
a 15% loss
in a year.
StormGuard
Measures Market Health
Not only do SectorSurfer's trend-following
algorithms inherently steer around and avoid
poorly performing funds, but its StormGuard
Indicator monitors overall market health
and advises a move to the safety of a money
market fund when market storms approach. The StormGuard Indicator is
calculated daily from a basket of broad
market indicators.
Optimized for Minimum Probability of Loss
The StormGuard Indicator optimally tunes
itself for the minimum probability of loss
according to the character of the
constituent funds/stocks of each
SectorSurfer Strategy by balancing the
probability of whipsaw loss from reacting
too quickly
to market dips against the
probability of loss from reacting too slowly
to major downturns.
Diversify and Rebalance? Warren Buffet instructs:"Risk can be
greatly reduced by concentrating on only a
few holdings."
SectorSurfer practicesserial diversificationby owning many very different things,
just one at a time.
Additional Resources
• Short video demo about how SectorSurfer
makes lower risk possible.
•
StormGuard Technical Details in the
SectorSurfer Online User Manual.
•
Sector Rotation Theory Page
provides theory summary and technical
explanations.
We
Kept it Simple!
After creating your new account:
Only
Four Steps to Get Started 1. View the My
Strategies Tour video (top left). 2. Click
, pick a Strategy, or create your own. 3. Check
charted performance by clicking
. 4.
Click to edit name and notes.
You're done!
After clicking your email alert:
Only
Four Steps for Trade Alerts 1. See
which ticker symbols to sell and buy. 2.
Click the
icon for
specific trade
information. 3.
Click your brokerage link and go make the
trade. 4. Click the
button. You're done!
Additional Resources
• Short video demo showing how to select or custom build
Strategies.
•
SectorSurfer Online User Manual details all
the features and functions.
•
Subscription Plans range from Free to just a monthly
pittance for Premium Strategies.
• Our will help you
quickly create an account to get you SectorSurfing.
SectorSurfer's Algorithm
Validation
Overview
SectorSurfer's validation is confirmed
by the
validation of each principle detailed in the
paragraphs below.
Trend Signals Exist in Market Data
In his 1996 book
Chaos and Order in the Capital Markets,
Edgar Peters applied the Hurst Range/Scale
analysis method to data from all capital
markets, including stocks, bonds,
commodities, and treasuries. He found that they
all have a significant short-term trend component that
dissipates after numerous months.
• See Hurst Exponent Reveals Trends on
the Sector Rotation Theory Page for further
technical information.
Momentum Strategies Really Work
When you can get the media, industry, and
academia to agree that something is real and
works, then you know you really have
something. These three momentum trading
articles do just that:
• The Economist:
Momentum in Financial Markets. A survey
of strategy results and expert commentary.
• Columbine Capital
Price Momentum - a Twenty Year Research Effort. Industry momentum white paper.
• Jegadeesh & Titman
Profitability of Momentum Strategies.
A fundamental academic momentum paper.
SectorSurfer's Performance is
Trend Based
How can we tell that the trend signal we
extract from the noisy market data really
does drive SectorSurfer's performance? The
Hurst exponent measures the quality of the
trend signal and has a month-end bump in its
character. This bump is a fingerprint
likewise found in the character of
SectorSurfer Strategy performance.
• See SectorSurfer's
Trend Fingerprint on the Sector Rotation Theory Page for
further technical information.
Trend Signals Exhibit
Stationarity
Stationarity refers to the character of a
random process remaining the same, such as
the distribution in heights of men, shoe
sizes for women, or trend lengths in market
data. Stationarity enables one to
confidently manufacture shoes of various
sizes even though the shoe size of the next
customer is unknown. Backtesting provides
assessment of market character. Stationarity
in market character enables strategy design
to learn from the past in order to improve
one's batting average for future investment
choices.
• See Trend
Signal Stationarity on the Sector Rotation Theory Page for
further technical information.
SectorSurfer's
Improved
Technology
Background
"Diversify and Rebalance" was born with MPT (Modern
Portfolio Theory) in 1950 when we had
rotary dial telephones. Today the telecom
industry has wireless digital cell phones
with touch screens, video cameras, voice
dialing, and GPS maps.
But,
the financial industry is still selling us 1950s
diversify and rebalance?
Extracting the Trend Signal is Everything
If the EMH (efficient
market hypothesis) were true, the future
would be random and the
Hurst exponent of market data would be
exactly 0.5, but it's not, because market data
contains significant trends. A trend
means that information from the recent past
tells you something about the near future.
There is nothing more important than to
apply the best signal processing
technology available to extract the trend
signal from noisy market data to improve one's
investment batting average. (Here's why, MPT is blind to trends.)
Differential Signal Processing
One of the most fundamental methods for improving the
signal-to-noise
ratio in data communications is
to eliminate common mode noise via
differential signal processing. That's why it's built into
Ethernet and USB.
Most charting and analysis software
evaluates ticker symbols independently,
which taints the analysis with common mode
market noise resulting in excess whipsaw
losses reacting to noise unrelated to its
own relative performance. SectorSurfer's
simultaneous
differential analysis eliminates common mode noise.
Matched Filter Theory
Matched filter theory provides the basis by which
trend signals can be optimally extracted
from noisy market data. The well-known academic paper
Profitability of Momentum Strategies, by Jegadeesh & Titman
used a simple equally weighted SMA (Simple
Moving Average) of length 6 months as its
trend measure. However, neither the SMA nor 6 months are near optimum
compared to the Matched Filter Theory solution. Simply put:
better trend analysis produce better results. See this
summary comparison and the Strategy Hall of Fame.
Automated Strategy Optimization
Investors familiar with technical chart
indicators know how tedious it is to
determine which indicators and what
parameters to use. SectorSurfer completely
automates this process for you. Better
results, less time!
Welcome!
SectorSurfer levels the playing field with Wall
Street by putting the power of
award winning
high performance investment algorithms in your hands. Its
True Sector Rotation
algorithm holds only the momentum leader during bull markets, and its
StormGuard
algorithm seeks to protect and grow your assets during bear
markets. Only by owning the trend leader and
avoiding the laggards can one simultaneously improve returns
and
reduce risk.
Higher Returns:
Returns cannot be improved by diversification
alone. Diversification inherently produces average
results
by owning a bit of everything. To improve
returns, one must own only the trend leader and
avoid the trend laggards. By optimally extracting
trend signals from noisy market data and owning
only the trend leader SectorSurfer can produce
higher returns as shown by example below.
--- Click link for more information. ---
White dot: S&P500. Yellow dot: SectorSurfer.
Probability of Loss:
We believe that risk is about losing money,
not about how wiggly the line on the chart
is. We believe that treating both up and
down-moves equally as risk is an error
because only down-moves contribute to
real loss. SectorSurfer's risk measure is
the probability of a 15% loss in a year,
as shown in the example chart below.
--- Click link for more information. ---
White dot: S&P500. Yellow dot: SectorSurfer.
True Sector Rotation:
True Sector Rotation is the method of owning the one, and only one,
best trending fund at any time. Since half of the market
sectors will, by definition, be beating the S&P 500 at
any time, owning only the trend leader is an excellent
way to beat the market.
Market data contains trends, and a trend means
that something from the past can tell you something
about the future. Thus, extracting trend signals from
noisy market data is the whole game.
SectorSurfer
extracts trends from noisy market date to
improve your investment batting average.
It works for ETFs, mutual funds and stocks.
StormGuard:
Market storms are much larger than market corrections
and require special detection methods. SectorSurfer's
StormGuard algorithm is designed to find the optimum
balance between reacting too quickly and producing
whipsaw losses, versus reacting too slowly and getting
hurt by the market storm.
StormGuard-Armor is our highest performance market
sentiment indicator. It examines three separate sources
of market data to derive whether the market is safe for
investing. By focusing on Safety First, not only are
losses reduced, but you keep more of your hard earned
returns. StormGuard-Armor is in fact the highest
performance market direction indicator on the market!
SectorSurfer's Value Proposition
We
believe high performance investment software should be for everyone — not just Wall Street.
1. Best
Safety Performance
Best
Bear Market Performance? Here's
Why:
Better performance requires more
information, not just tweaking the moving average type
or time constant. All well-known
market direction
indicators use just a single source of data (usually the
S&P500) as the basis for determining market direction.
Metaphorically, watching one knee of an elephant
to know if it's going to take a step has
definite
value. But, watching three knees provides
superior information, allowing earlier
detection and eliminating false positives.
Likewise, StormGuard-Armor achieves superior
performance by incorporating three sources of data to
provide three distinct views of the market.
Three Market Views: Price, Volume and Highs/Lows StormGuard
Armor was specifically designed to
consider
Safety First. By using a combination of
price, volume, and new highs/lows information
StormGuard-Armor is able to much more accurately
sense when the market is in danger. The
combination of price and volume signals whether
institutional investors are on the move or
waiting nervously at the door ready to run at
the first sign of trouble. Likewise, the new
highs/lows information signals whether value
investors are on the hunt or cautiously sitting
back. When either of the institutional or
value investors pull back, the market is dangerous
and StormGuard-Armor signals a move to safety.
The significant improvements to both primary
measures of risk for a simple largecap-midcap-bond
Strategy are illustrated in the charts above.
(click for details)
The Animated Charts Speak for Themselves:
The stark contrast between the multi-colored
equity curves of the sequential charts (above-left)
demonstrates the significance of actively and
accurately exiting dangerous markets, as opposed
to being satisfied with the buy-and-hold
diversification methodology of 1950’s MPT
(Modern Portfolio Theory) employed by
Wealthfront,
Betterment, and other
Robo
Advisors. Hover over the animated charts to enlarge, or
click to see all of them static in one view.
• Exiting bear markets to cash is a
thing of the past.
• Our
Bear Market Symbol enables specifying a
ticker
symbol or a Bear Market Strategy instead of
cash.
2. Best Bull
Market Performance
It Provides the Best Bull Market Performance — Here's
Why: If the market was truly a random walk
per the
Efficient Market Hypothesis,
there would be nothing better to do than buy-and-hold ordinary stock index funds and bond
index funds in a 60/40 proportion as
instructed by MPT (Modern Portfolio Theory
... circa
1950). However, academic researchers, Nobel
Laureates and industry studies
have all since
confirmed that trends exist in market data.
Since trend information inherently improves the
odds of making a better decisions, all necessary steps
must be taken to optimally extract them
from noisy market data.
Optimally Extracting the Trend Signal is Everything:
We employ the cross-disciplinary sciences of
Matched Filter Theory,
Differential Signal
Processing, and
Adaptive Filter
Design from
the field of electronic signal processing — the
same
technologies that enable cell phones, Ethernet,
and USB to perform so well. By owning only the
trend leader and avoiding the trend
laggards True Sector
Rotation simultaneously
improves returns and reduces risk.
The Charts Speak for Themselves:
The yellow equity curve in each sequential
chart (left) demonstrates the proficiency
of True Sector Rotation
for numerous asset classes, including broad index
funds, sectors, world regions, stocks and even
retirement plans. Hover over the charts to
enlarge, or click to see all of them static in
one view. SectorSurfer literally leaves
Robo-Advisors in the dust on all measures of risk and return precisely because they’ve
employed out-dated, average-performing MPT. These performance
comparisons
to
Betterment and
Wealthfront illustrate this point.
•
Adaptive trend filter tuning for any set
of funds. • Automatically adjusts
filter shape and duration. • Simplifies
Strategy design — no PhD required.
3. SectorSurfer is Easy to Use
We'll
do the
Hard Work ...
... While You
Have a Life.
• Typically just 3 to 5 Trade Alerts per year.
• SectorSurfer signals - you make the trade.
• Select a ready-made Strategy from a list, or
try your ideas with your own custom design.
• Its as easy or complex as you'd like it to be.
4. Our Algorithmic Pedigree
Conquering The Seven Faces of Risk
By
Scott Juds
''This book is one of the
very few 'must read' books. For those
who have been burned by the 'diversify
and rebalance' mantra, ''Conquering the
Seven Faces of Risk'' is sorely needed,
and Scott Juds truly delivers. As a
fiduciary, I find SectorSurfer's risk
mitigation algorithms to be so far
superior to the conventional
buy-hold-and-rebalance models that I
cannot justify risking my clients'
assets with the latter. I am impressed
with Scott Juds' mission to educate the
retail investing community.''
- David Yeh, MD, (Retired Nuclear Physician),
Investment Advisor,
Author of ''The
Busy Doctor's Investment Guide''
How to Become a SectorSurfer
How We Work
• Analyze each of your
strategies every day.
• Send a trade alert if
action is required.
• Keep you invested in
only the best funds.
• Reduce your risk of
loss in the market.
• Our complex signal
processing algorithms
identify real trends in
noisy market data.
• Steering around the
potholes and sitting
out market storms
improves both risk
and return measures.
• Dedicated computers
automate everything.
• We don't touch your
investment accounts.
You make the trades.
• We don't touch your
credit card. Amazon
Payments processes all
subscriptions.
• We don't provide
financial advice that
is specific for your
personal situation.
We'll do the Hard Work ...
... While You go Have a Life!
"This product stands
like an oak tree amid a forest of saplings. Over the years I
have examined dozens of investment advisory services, but this
one is the best by far. As a retired USAF officer, of particular importance
is their popular TSP Thrift Savings Plan strategy designed for
military/federal employees. I've been an enthusiastic SectorSurfer since January 2011."
Les Mosier, Chaplain, LtCol,
USAF (Retired)
“I can tell you with certainty that SectorSurfer stands
in a class of its own as the premier investment tool for
individual investors. Its high performance algorithms literally
level the playing field for individual investors against the
big traders on Wall Street and will provide
you with the confidence and to wisely manage your own
investments.”
Richard Erkes, Former Chair of the State of Illinois
Retirement Board
Founding member of the Chicago Board of Options
Exchange
Former Program Director of the LA AAII Chapter.
"It is very satisfying to see my
returns beating the market averages month after month. It even made my wife's
restrictive and excessively diversified government retirement
account perform well. This investment tool
tops my list!"
Warren Hyland, CEO,
AmbienEco Group
"I
finally pulled the trigger on the
SectorSurfer Fidelity KickAss Strategy. Since then the
market has not been as hot AND
yet I notice that the fund recommended by Sector Surfer
is doing very well. My
GAUD this is really going to work! What
was once only an academic understanding of your methods
has sunk in. Thank you for doing the hard work. Dan Wahl, Design Engineer, "IceCube" South Pole
Neutrino Observatory Physical Sciences Laboratory, University of
Wisconsin - Madison
"The effort/time you have put into your web site has
produced outstanding results. I spend a lot of time on
finances, and your web site is the finest I have ever
seen. I am an ex-fighter pilot, land
developer, and a full-time trader for the last 10 years." Joe Schuchter, Full-time trader.
"With
SectorSurfer's algorithms doing all the work, I get much better
results and have more time in the day for real life. I used to spend hours
each day sorting through funds looking for winners. "
Chris Feise, Retired
Professor Washington State University
Former Director of Center for Sustaining
Agriculture and Natural Resource
"I had no idea which
funds to own until I found SectorSurfer. Now I know what to
do and when to do it. Most importantly, I know SectorSurfer will look out for
me when I'm busy taking care of business."
Kim Cahuas, President, Western Reserve Technology
"I used to be literally afraid to look at my retirement
account, but Sector Surfer thankfully keeps track of it
for me now and always keeps me in the best funds. It
really is amazing and gives great peace of mind!"
Brandon Hulet, Teacher
Snohomish County, Washington
-------
*Please Note: Limitations: Not all user comments are positive. SectorSurfer does not endorse any specific investment strategy, nor expresses any opinion
as to whether any strategy is apprpiate or suitable for a subscriber. Different types of investments and/or investment strategies involve varying degrees
of risk and volatility, and at any specific point in time, or over any specific time-period, any investment or investment strategy can and will suffer
losses, at times substantial losses. Therefore, it should not be assumed that the future performance of any specific investment or investment strategy,
including the investments and/or investment strategies that may be employed in conjunction with SectorSurfer algorithms, will be profitable, equal any
historical performance level(s), or prove successful. Keeping in mind that no subscribers, situations, or experiences are exactly alike, the above should
not be construed as any assurance that SectorSurfer may be able to help any subscriber achieve the same satisfactory results. To the contrary, there can
be no assurance that a SectorSurfer subscriber will experience a certain level of results or satisfaction.
Notice: Your registered use of this site is
considered equivalent to your signature as evidence of your
acceptance of our Terms of Use, and Privacy Policy. Merlyn.AI, SectorSurfer, True Sector Rotation, StormGuard,
StormGuard-Armor, Own-the-Bubble, Polymorphic Momentum, Tactical
Diversification, Temporal
Portfolio Theory, SwanGuard, and SumGrowth
Strategies, are all trademarks of
SumGrowth Strategies, LLC. Seattle WA 98125. Copyright 2010-2016 SumGrowth Strategies,
LLC. All Rights Reserved.
SumGrowth Strategies,
LLC is not a
registered investment
advisor and does not provide professional financial investment
advice specific to your life situation. SectorSurfer is
solely an
algorithmic strategy analysis tool that produces trade signals according
to the set of funds you provide to it for analysis. Strategy performance
is hypothetical, based on trading at the market close of
trade dates, and does not include associated trading fees or
subscription fees. Past performance is no guarantee of future
performance. Losses can and will occur over time as the market's
character reacts to world events. SectorSurfer may only be used for your personal analysis and education purposes.
Please Read More Here.