Alpha Sigma Market Systems Presents:
Portfolio Preserver™ Investment Software

  • The problem: Volatility in the financial markets

  • Complication: Traditional Buy and Hold does not work in today's markets

  • The solution: The Portfolio Preserver™ - Optimized Asset Allocation and Timing Model to avoid prolonged downturns

Here's What a Buy-And-Hold Portfolio
Has Faced Over The Last 10+ Years

  • Sharp market downturns have devastated many investment and retirement accounts heavily concentrated in stocks

  • If you had held over these two downturns your portfolio would have suffered greatly

  • Is there any way these major losses could have been prevented?

  • The answer is yes! Let's look at how...

The Answer is Modern Portfolio Theory (MPT) -
a Nobel Prize Winning Strategy
for Optimized Asset Allocation

  • Investors should not only be concerned with returns but also with the risks in obtaining those returns

  • Risk is mathematically quantified as volatility measured by the deviations from the average return

  • Investors should be invested in various asset classes whose performance behaviors are mostly uncorrelated with each other

  • MPT provides a way for investors to seek their required returns while minimizing risk via optimized allocations among various investment classes

Modern Portfolio Theory Has Problems However

  • Important assumption of this theory: The future will behave like the average of the past

  • It's exactly this assumption that has produced serious losses in many portfolios during the past two recent downturns

  • The reason is because MPT always places the investor at least partially in those asset classes with the greatest risk

  • There is no consideration for current trends

  • Proven to be a mathematically successful strategy for time horizons on the order of 40-50 years but this has not been the case over the previous decade

  • But what if you don't have 40-50 years until retirement? Let's consider a couple of examples...

MPT Results for a Portfolio Beginning in 1990

  • A dynamic basket of asset classes as MPT allocated with monthly reoptimizations for a target 10% compounded annual return

  • The dot-com bubble burst of 2000 (30% decline) and the 2008 mortgage meltdown (50% decline) were devastating to a pure MPT portfolio.

  • Over the 20 year period the return actually achieved was a measly 5.3% annually and that came at a fairly high risk as well
And if that's not enough to bum you out, look at what would have happened had you been unfortunate enough to invest at the beginning of 2000, just before the dot-com bust...

MPT Results for a Portfolio Beginning in 2000

  • Here the returns have been even more measly and your risk would have been about the same!

  • So the questions is: Is there a way to reap the benefits of MPT without risking market downturns?

  • The answer is: yes, and we've got it!

Solution: Market timing to the rescue!

  • The existence of identifiable trends in the market over meaningful periods of time presents an opportunity to exceed those returns that MPT would ordinarily provide by the application of a market timing tool

  • The solution: Applying a patent pending market timing strategy that is specifically optimized to each asset class provides substantially greater returns with reduced risk compared with the traditional MPT strategy of allocate-buy-hold-reallocate

  • We've combined timing strategies with the asset allocation calculations as given by MPT into an investment tool called the Portfolio Preserver™

How the Portfolio Preserver™ works!

  • When the timing indicator turns bearish in a particular asset class, the % of the portfolio that MPT recommends to allocate to that asset class can either go into a riskless investment (conservative)

  • Or it can even be used to short that class (aggressive) depending on the investor's risk tolerance

  • Various other market timing strategies are available for consideration including margin strategies

  • Market Timing strategies do not normally apply to any of the bond classes but can should the investor choose to do so

  • All other tenets of MPT remain the same

  • Next let's look at the various asset classes available for consideration...

Asset Classes Available for Consideration

  • These asset classes of varying volatilities (risk) and correlation can be selected:

    • Large-Company Stocks
    • Small-Company Stocks
    • Investment-Grade Corporate Bonds
    • Long-Term Government Bonds
    • Intermediate-Term Government Bonds
    • Treasury-Bills
    • International Stocks
    • International Bonds
    • Real-Estate Investment Trusts
    • Gold (optional)

  • The Portfolio Preserver™ database includes monthly total return data from 1928 for all asset classes

  • Minimum and maximum allocation user-specified percentages can override the software recommendations

  • Let's now see how applying the most conservative of the Portfolio Preserver's™ working principles to the example two portfolios would have changed things...

Comparison of MPT-only 1990 Portfolio with Portfolio Preserver™ Enhanced Portfolio

  • Shown is a conservative market timing portfolio (green) where the investor is placed in the safety of T-bills when the Portfolio Preserver's™ asset class exit/re-enter recommendations are followed

  • Compare the results to the classic MPT only approach shown earlier (magenta)

  • As you can see the market timing approach is much less risky while achieving the goal of producing a 10% return
Now let's look at the corresponding portfolios for 2000...

Comparison of MPT-only 2000 Portfolio with Portfolio Preserver™ Enhanced Portfolio

  • These results are even more spectacular as the conservative market timing portfolio nearly achieved its required 10% while the traditional MPT portfolio barely made money

  • Note that in this case, too, the risk was drastically reduced over the traditional MPT portfolio

  • These amazing results are of interest to those individual investors as well as investment managers who are serious about attaining a certain portfolio return at reduced risk.

Summary

  • Adding market timing to MPT allows for increased returns at lower risk

  • It is possible to achieve desired levels of return at reduced risks with only monthly attention to your portfolio

  • Using over eight decades worth of monthly data minimizes sampling error

  • The Portfolio Preserver™ provides the investor with objective and emotionless recommendations

  • Please examine the Features Guide for more details on the Portfolio Preserver™
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Portfolio Preserver™ Software
Fully Customizable Solutions!

•  The Portfolio Preserver™ software tool will help you make decisions about investment portfolio content and asset class allocation. Using over eight decades of monthly data for nine asset classes the Portfolio Preserver™ uses a Nobel Prize winning strategy to minimize portfolio risk while still producing a desired return. But the Portfolio Preserver™ also goes beyond this approach by incorporating proven market timing strategies that provides recommendations to the investor that avoid the bulk of losses during declining periods such as the recent downturn.


•  What the Portfolio Preserver™ will tell you is in what proportion you should hold investments in various asset classes and when your component in those classes should be held long, leveraged, or instead be withdrawn and held in a riskless earning asset until the time is right to re-enter.



•  As a bonus the Portfolio Preserver™ provides numerous useful personal financial analyses and calculations for planning purposes and to aid in making decisions regarding significant purchases.


•  For a complete description of software functions please visit the Portfolio Preserver™ Features Guide.


•  Please try the software for yourself and run the Portfolio Preserver™ Demo.

Portfolio Preserver™ Email Report
Save Time! Save $$$!

•  New Feature! Don't have the time nor the desire to operate our portfolio allocation software? No problem! Let us do the grunt work for you.


•  All you need to do is answer a few simple questions concerning your investment time horizon and appetite for risk and we'll prepare a monthly email report personalized just for you.


•  Your report will contain an easy-to-understand table. It will show your latest portfolio allocation guidance, based on the market timing capabilities of the Portfolio Preserver™, and provide specific recommendations for rebalancing your portfolio. We'll also include an online allocation calculator that will show you exactly how to rebalance your portfolio--share by share. Try the Portfolio Rebalancing Applet Demo.


•  On top of all that you will see much higher returns as compared with those held in classically allocated portfolios (used by many fund managers). Even more importantly, you will see that your risk of generating a superior return is significantly lower compared with theirs. We think you'll be wowed by these results.


•  What you have to lose is nothing. If after two months you don't like our service, we'll refund your money. No questions asked. Instead of losing money during the next market downturn, make it! Click here to get started or read the Email Report Guide to find out more.

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