Sound mind investing dynamic allocation t-1

As a result, investors following the strategy avoided much of the pain, losing just — And keep in mind, there were no subjective decisions for investors to make — no guessing about how much wider the COVID virus might spread or how much further the market might fall. All that was required was to trust the system and make the trades it called for. In fact, DAA is never more than one-third positioned in cash. The other two defensive asset classes, gold and bonds, often gain when stocks are in decline or struggling for direction.

In March, U. For many DAA investors, the peace of mind of continuing to be defensively positioned at a time of so much ongoing fear and uncertainty was worth even more. Following small gains in May and June, fueled in part by replacing cash with U. Far better to build a plan based on a realistic rate-of-return assumption, and importantly, a plan likely to maintain a level of volatility you can live with.

By offering improved returns vs. Due to the strategy pursued by the advisor, the Funds may experience a high portfolio turnover rate. Because the Funds will bear their share of the fees and expenses of the underlying funds, you will pay higher total expenses than would be the case if you invested directly in these funds.

There is no guarantee that any investment strategy will succeed; the strategy is not an indicator of future performance, and investment results may vary. Asset allocation does not ensure a profit or guarantee against loss. Investments in international markets entail special risks such as currency, political, economic, and market risks. Investments in real-estate related securities involve special risks associated with an investment in real estate, such as limited liquidity and interest rate risk and may be more volatile than other securities.

Trading in commodities may involve substantial risks, and investment exposure to the commodities market may subject the Fund to greater volatility than investments in traditional securities. Bonds are affected by a number of risks, including fluctuations in interest rates, credit risk, and prepayment risk. An investment in an exchange-traded fund ETF generally presents the same primary risks as an investment in a conventional fund i. The value of derivatives may rise or fall more rapidly than other investments.

For some derivatives, it is possible to lose more than the amount invested in the derivative.

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Difference: Using different investment vehicles within some asset classes While the "triggers" will be the same, the "vehicles" used to invest in the various asset classes will be somewhat different. The Adviser has built upon the original research that inspired the DAA strategy and identified a few additional opportunities that the advisor believes will add value to the DAA process.

In their testing, these "enhancements" showed the potential to boost long-term performance as well as improve the Fund's path to safety when markets get particularly volatile. The Fund will own some different investments within the same broad asset classes.

Likewise, when domestic stocks are owned, a small allocation to a fund or funds selected using a Sector Rotation process will be included. There are several of these tweaks to the vehicle lineup that have shown the potential to improve returns. Within each asset class, rigorously tested mechanical processes will be used to select any investments used to supplement the core DAA holdings newsletter readers are familiar with. Not surprisingly, most of these processes use some form of Upgrading for investment selection.

Testing has revealed that some categories benefit more from these enhancements than others, which has been taken into consideration in determining the exact mix of investments for each specific asset class. Difference: Responding more quickly to changing market trends While the first difference between the Fund and newsletter versions of DAA focuses on boosting returns, the second is primarily a risk-reduction measure.

During the research process, the Adviser discovered an automated approach that allows a quicker flight to safety during periods of dramatic market change. As long-time Upgraders know, the weakness of most trend-following systems including Upgrading and DAA is they are often slow to respond at market turning points. When markets change rapidly, this can mean significant losses can occur before the trailing data shifts enough to trigger a response by the system.

While the regular DAA process helps us avoid being in the wrong asset classes over the intermediate- to long-term, the advisor believes this new tool will help speed up the Fund's response to rapidly changing market conditions, moving its assets to safety sooner. Theoretically, an investor who owned exactly the same investments as the Fund without paying any additional trading costs would outperform it by the amount of its expense ratio, which is capped at 1.

Of course, it isn't possible for an individual to replicate what the fund is doing in real-time because the needed data won't be available. The Adviser believes the Fund's enhancements to standard DAA will offset some or all of the additional expense over time. But even if that doesn't occur, past experience indicates there will be many for whom it's worth paying a little extra in order to automate their use of the strategy. Those investors will know they are getting timely implementation of the DAA process, insulating themselves from the very real risk of their emotions compromising the application of the strategy, plus getting all of the very best ideas SMI Advisory Services has uncovered in its extensive and ongoing DAA research.

For these investors, it's well worth the small additional expense to be free from the responsibility of having to monitor and execute changes in their portfolio every month. Expect different performance outcomes While we can't know how much the enhancements included in SMIDX will impact future performance, we can be reasonably sure they will cause the Fund's returns to differ from the newsletter's DAA returns. This will likely be most obvious over shorter-term periods, particularly at times when SMIDX has taken steps to reduce risk more quickly than the newsletter's portfolio.

Naturally, the Adviser wouldn't be adding the complexity of these enhancements if testing hadn't shown they would have added considerable value in the past. But it's important to understand that the Fund's performance won't march in lock-step with the newsletter.

Over time, we expect these differences to help offset the additional costs of using the Fund. But on a year-to-year — and certainly month-to-month — basis, they may be confusing to those who don't understand that the Fund's specific application of the DAA strategy is considerably different than the newsletter's.

On the limitations of backtesting It's reasonable to be skeptical when presented with strategies based entirely on theoretical backtesting. Fortunately, Austin Pryor has covered all these bases with his Sound Mind Investing Handbook and monthly financial newsletter. I have found his counsel to be both biblical and practical.

I know of no other individual with whom I would consult with more confidence on the subject of mutual fund investing than Austin. If you will spend the time to read carefully the counsel Austin provides, you will find it both time and money well spent. Austin Pryor writes without vested interests in any specific plan or fund. This means greater candor and objectivity. Austin is a man with a larger and better perspective. We continue to endorse their services because of their experience and integrity.

There are few that I have as much respect for and confidence in than Austin. His counsel in the investment area has proven to be extraordinarily wise and discerning over a long time period. I consider it a privilege to be able to make this recommendation.

About Sound Mind Investing At Sound Mind Investing, we take the fear out of investing with objective, proven strategies do-it-yourself investors can implement with confidence.

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For fund information, call , or visit smifund. This month, SMI Advisory Services the Adviser is pleased to announce a similar opportunity for investors interested in having the Adviser manage their implementation of the Dynamic Asset Allocation strategy. Here are the main ones. Similarity: Investing in the same asset classes at the same time The most important aspect of Dynamic Asset Allocation is being invested in the right asset classes — and steering clear of the wrong ones — at the right times.

SMIDX will use the same process as the newsletter to determine which asset classes to invest in choosing between U. Given that these "triggers" for switching between asset classes will be the same, and that this is the most important part of the strategy, it's reasonable to expect that the Fund should follow a similar performance trajectory as the newsletter's application of the strategy.

Difference: Using different investment vehicles within some asset classes While the "triggers" will be the same, the "vehicles" used to invest in the various asset classes will be somewhat different. The Adviser has built upon the original research that inspired the DAA strategy and identified a few additional opportunities that the advisor believes will add value to the DAA process. In their testing, these "enhancements" showed the potential to boost long-term performance as well as improve the Fund's path to safety when markets get particularly volatile.

The Fund will own some different investments within the same broad asset classes. Likewise, when domestic stocks are owned, a small allocation to a fund or funds selected using a Sector Rotation process will be included. There are several of these tweaks to the vehicle lineup that have shown the potential to improve returns.

Within each asset class, rigorously tested mechanical processes will be used to select any investments used to supplement the core DAA holdings newsletter readers are familiar with. Not surprisingly, most of these processes use some form of Upgrading for investment selection. Testing has revealed that some categories benefit more from these enhancements than others, which has been taken into consideration in determining the exact mix of investments for each specific asset class.

Difference: Responding more quickly to changing market trends While the first difference between the Fund and newsletter versions of DAA focuses on boosting returns, the second is primarily a risk-reduction measure. During the research process, the Adviser discovered an automated approach that allows a quicker flight to safety during periods of dramatic market change.

As long-time Upgraders know, the weakness of most trend-following systems including Upgrading and DAA is they are often slow to respond at market turning points. When markets change rapidly, this can mean significant losses can occur before the trailing data shifts enough to trigger a response by the system.

While the regular DAA process helps us avoid being in the wrong asset classes over the intermediate- to long-term, the advisor believes this new tool will help speed up the Fund's response to rapidly changing market conditions, moving its assets to safety sooner. Theoretically, an investor who owned exactly the same investments as the Fund without paying any additional trading costs would outperform it by the amount of its expense ratio, which is capped at 1.

Of course, it isn't possible for an individual to replicate what the fund is doing in real-time because the needed data won't be available. The Adviser believes the Fund's enhancements to standard DAA will offset some or all of the additional expense over time. But even if that doesn't occur, past experience indicates there will be many for whom it's worth paying a little extra in order to automate their use of the strategy. Those investors will know they are getting timely implementation of the DAA process, insulating themselves from the very real risk of their emotions compromising the application of the strategy, plus getting all of the very best ideas SMI Advisory Services has uncovered in its extensive and ongoing DAA research.

For these investors, it's well worth the small additional expense to be free from the responsibility of having to monitor and execute changes in their portfolio every month. Expect different performance outcomes While we can't know how much the enhancements included in SMIDX will impact future performance, we can be reasonably sure they will cause the Fund's returns to differ from the newsletter's DAA returns.

Not just to me, but to tens of thousands in the Christian community through his Sound Mind Investing Handbook and website. For more than 25 years, SMI has been successfully guiding Christian families with Biblically sound financial principles and objective investment strategies.

His easy-to-understand explanations are really helpful, especially for a beginner like me with little investing experience. For clear, effective, and trustworthy financial advice, I can think of no better source than Sound Mind Investing. Here is a man of great insight who has the ability to make difficult subjects easy to comprehend.

It is obvious that Sound Mind Investing combines Biblical wisdom with very practical and understandable application. Charles F. By helping people not only invest wisely, but invest for God-glorifying purposes, Sound Mind Investing is playing a vital role in the area of Christian finance. The knowledge you gain from them will give you tremendous confidence.

Everything I know about investing I learned from Austin Pryor. Fortunately, Austin Pryor has covered all these bases with his Sound Mind Investing Handbook and monthly financial newsletter. I have found his counsel to be both biblical and practical.