Investors FastTrack

Quality Data for Investing Strategies

FT Cloud

Faster Access to Large Data Sets

The FT Cloud Spreadsheet just got faster!

Navigate to the spreadsheet tab, then click the “Preload data from FT4win” checkbox. This will launch the data preload wizard. Follow the instruction and you’ll be all set.

FT Rebalance Data PreLoad

If you have an FT4web, you have access to all or part of the FastTrack database on your local computer. Instead of connecting to the cloud for each ticker (reasonable for 1-750 tickers, but quite time consuming for large datasets), you can now preload the data from your local computer and cut down the data transfer overhead.

So, the HUGE benefit of pre-loading is the MASSIVE time savings gained by eliminating the data transfer overhead. Reading the data from your hard drive to FT Cloud+ is much much quicker than reading the data from the FastTrack servers to FT Cloud+.

If you run into any issues give us a call at (866) 295-0166 or email us at ftcloud@fasttrack.net.

 

Use Momentum to Improve Investment Returns

Introduction

Investors FastTrack and FastTrack strategies have been around for a long time and have a great track record. For 25 years we’ve been training money managers and wealthy individuals how to increase returns and reduce volatility with FastTrack products. This paper discuses a typical investors profile (derived from the years of speaking with investors), the pitfalls of the typical investor, and how to FT Cloud+ can improve the typical investor’s portfolio.

Every Investor’s Goal: Increase returns and reduce risk. FT Cloud+ uses high quality data, processing power or our server and your computer to crunch the numbers and make achieving this goal simple and fast.

A picture speaks a thousand words… Over the past 10 years a typical investor has experienced major drawdowns and lower returns than the S&P 500. FT Cloud+ has produced a fraction of the drawdowns and retained the upside of a good investing strategy. Read more below to dig into the FT Cloud+ details.

top chart
Red Line: Typical Investor
Green Line: FT Cloud+
Grey Line: S&P 500

Profile of a Typical Investor

FastTrack has been is a nexus of money mangers and wealthy individuals for the past 25 years. We’ve spoken to thousands of different investors and its safe to say the profile below is extremely accurate.

The red line in the chart above is the average investor’s portfolio. The red line is a 60/20/20 portfolio. That’s 60% S&P 500, 20% long investment grade bonds,and 20% cash, then rebalanced to those allocations at the beginning of every year. We can see it’s not a strong strategy. Its highly correlated to the S&P (99.3%), produced a 37.3% draw down, and weighs in at approximately 1.25 percent less annualized return a year compared to buying and holding the S&P.

Every week we speak to investors that hold this portfolio and claim “diversity,” but have a portfolio substantially similar to the red line above. What does it take to break out of this rut? Below we’ll look at a strategy with 4 trades a year and holding the best 4 fund of diversified family. FT Cloud+ does the heavy lifting, all you do is pull the trigger.

Improve With FT Cloud+

Be More Active To Improve Returns (But No Need to Be To Active)

As the “typical investor” analysis above shows, buy and hold isn’t a great strategy. With FT Cloud+, we’re going to make 4 trades a year, and each trade we’ll rank our family of tickers by total return and guy the top 4 tickers in the list. Its very straight forward. And, its called the “Momentum Model” because when funds are trending up, we buy them. When funds are trending down, we sell them.

The green line in the chart above is the FT Cloud+ Momentum Strategy. Its a simple strategy with 4 trades a year and always hold 4 fund at approximately 1/4 of total assets each. The power of the FT Cloud+ model is which 4 funds you hold. FT Cloud+ chooses the funds based on momentum and relative strength. Its not a black box or a fancy algorithm. Every quarter FT Cloud+ ranks a group of funds (in the green line we ranked by total return), sorts by value, and buys the top 4 funds.

More Details

Here’s how FT Cloud+ uses momentum:

  • Step 1 – Choose a diversified list of funds you might possibly want to own. For this example we used 21 Vanguard mutual funds. The list of 21 (see entire list in appendix A) is a diversified mix of plain vanilla Vanguard funds. We’ve go equities, bonds, money market, international, and commodities.
  • Step 2 – At the end of every quarter we rank the 21 funds by total return for the prior month. So, this give us a ranking of the trailing 1 month.
  • Step 3 – Sell all positions in our portfolio. Sort our ranking with the highest total return at the top. Reinvest our assets evenly among the top 4 assets in our ranking.

Summary

It pays to be a more active investor and with FT Cloud+ doing all the hard work and heavy lifting, its a straight forward and painless process.

All our strategies are easy to understand and easy to execute. And best of all… they work. There’s no need to stick with strategies producing big drawdowns, high correlations, weak performance.

Visit http://www.investorsfasttrack.com today to sign up. Use promo code “MARCHFREE” to get your free trial of FT Cloud+.

Tickers in Family

  1. VUSTX – Vanguard INV:Long-Term US Treasury
  2. VWESX – Vanguard INV:Long-Term Investment Grade
  3. VMMXX – Vanguard INV:Money Market Prime
  4. VBMFX – Vanguard INV:Total Bond Market Index Fd
  5. VFIIX – Vanguard INV:GNMA
  6. VFSTX – Vanguard INV:Short-Term Investment Grade
  7. VWEHX – Vanguard INV:Hi-Yield Corporate
  8. VGHCX – Vanguard INV:Health Care
  9. VWINX – Vanguard INV:Wellesley Income
  10. VINEX – Vanguard INV:International Explorer
  11. VGENX – Vanguard INV:Energy
  12. VTRIX – Vanguard INV:International Value
  13. VEXPX – Vanguard INV:Explorer
  14. VWUSX – Vanguard INV:US Growth
  15. NAESX – Vanguard INV:SmallCap Index Fund
  16. VEXMX – Vanguard INV:Extended Market Index Fund
  17. VMRGX – Vanguard INV:Morgan Growth
  18. VGSTX – Vanguard INV:STAR
  19. VEIPX – Vanguard INV:Equity Income
  20. VQNPX – Vanguard INV:Growth & Income
  21. VFINX – Vanguard INV:S&P 500 Index Fund

Timing FT Cloud Strategies

Time strategies to minimize drawdowns
Green = Quarterly Trading with timing;
Red = Quarterly trading with no timing;
Grey = S&P 500
1/28/04-1/28/14

Today we released a new feature in FT Cloud version 1.6.0.10: Drawdown Minimizer

FT Cloud modeling produces strategies with good risk-adjusted returns. Now, the Drawdown Minimizer adds safety and consistency.

Here’s a good example:

Quarterly Trading – Past Three Years

A number of FT Cloud users have developed quarterly trading strategies that works well and require very little trading. The chart below is the “VG-9” family, traded quarterly.

Three year - no timing
Red = Quarterly Cloud with no timing;
Grey = VFINX – Vanguard S&P 500
1/28/2011 – 1/28/14

Red Parameters

We see that over the past three years, its been an excellent strategy. We’ve got annualized returns of 19.8% for FT Cloud vs a 14.4% for VFINX over the three year period. And, that’s with a fraction of the volatility. The FT Cloud strategy posted a 3% standard deviation and a 1.89 ulcer index, vs VFINX coming in at 4.8% standard deviation and 4.9 ulcer index.

10 Year Look

Look at a 10 year period. The the quarterly trading strategy had a very significant draw down when the market turned in 2008. In some markets, quarterly trading alone is not fast enough to move assets to safety.

secondtiming
Red = Quarterly Cloud with no timing;
Grey = VFINX – Vanguard S&P 500
1/28/2004 – 1/28/14

The quarterly trading strategy trades every 3 months and then trades us into the best assets in our family. Since FT Cloud strategies are 100% invested and all members of VG-9 family declined in value, the red line experienced a strong draw down. (Albeit more muted than VFINX with a max draw of 47% for FT Cloud vs 55% for VFINX. We still moved into the best funds of VG-9 on the way down)

Improve with Timing

Time strategies to minimize drawdowns
Green = Quarterly Trading with timing;
Red = Quarterly trading with no timing;
Grey = S&P 500
1/28/04-1/28/14

In the chart above the Minimizer’s green line removes the steep drawdown of the red line using parameters of 50 and 200. When the 50 day moving average is above the 200 day moving average, we own the red line. When the 50 day moving average is below the 200 day moving average, we move to cash. The gold vertical lines show the timing trade dates.

The green line posted a strong 9.38% annualized return less volitility and fewer trades(no quarterly trades from 7/22/08 – 9/8/09

In summary, the Minimizer’s simple timing strategy improves the FT Cloud asset allocation with less trading.

See below for the list of parameters used above.

Timing Parameters
Timing Parameters
Red and Green Parameters
Red and Green Parameters

Family = VG-9 NAESX, VFIIX, VFINX, VGENX, VGHCX, VGPMX, VUSTX, VWEHX, VWESX

 

 

Support

FastTrack is known for high quality dividends and highly quality support. Our tech support lines are open 8:30AM-5:00PM central all market days.

For FT4Web and FT Comm support, call our main line at (866) 295-0166 or email support@fasttrack.net

For FT Cloud, FT Cloud+, and FT Lightning support, call us at (646) 755-9895  or email ftcloud@fasttrack.net