Managed Risk Investing

• Managed Risk Investing
• TangoETF Asset Allocation Rotation
• TangoETF Growth
• TangoETF Balanced
• TangoETF Endurance
• TangoETF Signal
• Inverse Option
• Long / Short Strategy

TangoETF Endurance Portfolio (Sample Report)

Today's Holdings

Today's Gains

Next Day's Actions

Portfolio Chart

Portfolio Statistics

The Buy/Sell Market Signal measures the risk level in the Market. A Sell Signal indicates a lot of risk in the Market and the probability is greater that the Market will go down rather than go up in the near future. A Buy Signal is just the opposite, indicating less risk in the Market and the probability is greater that the Market will go up rather than down in the near future. The Buy/Sell Market Signal cycle occurs on average 2-3 times a year. The Endurance Portfolio is in the market at all times and does not use the Market Signal or Bull/Bear Signal.

Bull/Bear State Signal  

The Bear State Signal identifies a Bear Market environment which is the most opportune time to use the Inverse Option (essentially like shorting the market) to profit from a drop in the market. The Bull State Signal identifies a period which is not the opportune time to use the Inverse Option. The Bull/Bear State is the longer term and occurs on average 1 time every 1.5 years.

 The difference between the Market Buy/Sell Signal and the Bull/Bear State Signal is Intermediate Term and Long Term. How do we use these two signals? When the Bull State is in effect, the sample portfolio will trade based on the Buy/Sell Market Signal: Long/Money Market corresponding with the Buy/Sell Market Signal. When the Bear State is in effect, the sample portfolio will trade based on the Market Signal: Long/Inverse(short) corresponding with the Buy/Sell Market Signal.

How They Work Together

This sample portfolio will use an Inverse trade of 50% Inverse Fund and 50% Money Market. So, during a Market Sell Signal within a Bear State, the sample portfolio will in effect be 50% short the Market by holding an Inverse Fund.

From time to time, the sample portfolio will use different Inverse Funds. The Inverse Fund will be identified in the Daily Report, for example, "Buy MYY" will appear as the Next Days Action, where the portfolio will buy shares equal to approximately 50% of total portfolio value.

TangoETF Endurance Advantages

The TangoETF Endurance trading system is a completely new approach made possible by the many asset classes available with ETF's. All the ETF's in this trading system are in asset classes that are uncorrelated with the market equity asset classes. So they do not move with the equity markets such as the S&P500, Russell2000, NASDAQ Composite, or any other market equity index. Since in TangoETF Endurance there are enough asset classes that are not correlated with each other or the equity market, there up and down moves tend to cancel each other out. The system is designed to hold the three top performing ETF's and if they lose their positive trend we rotate to a better positive trend. Therefore no market risk management signal is needed for investing in TangoETF Endurance. You can think of this system as asset allocation with rotation. This trading system is not designed for high performance, it is designed to provide 12 - 14% annualized return over the long haul with low risk/low standard deviation and 6 - 8% Max Drawdown. The above investing characteristics have some great new advantages but also there are some new risk's, the risks are covered below.

When We Invest in Endurance

We invest in Endurance Portfolio with the Moderate Portfolio or the Aggressive Portfolio or all three during a Buy signal, then secondly when the Sell signal is on and we go to cash, then  we invest the cash from our other portfolios in Endurance. Sometimes we are in cash for months and this keeps us in the game during a Sell signal.

Also, while on a Buy signal , we invest in the Moderate Portfolio and or the Aggressive Portfolio and are not invested in Endurance. During the Sell signal, we invest the cash from Moderate and/or Aggressive into Endurance. Thus using Endurance in place of Money Market.

TangoETF Endurance Risk

 As you can see from the chart above we do not have much history to evaluate this trading system. Why, because most of the ETF's used in the portfolio's holdings are relatively new. All the portfolio ETF's put together for the design of this trading system do not allow a start date for testing before 10/31/2006. So the risk is that we don't have enough data to thoroughly test for evaluation.

Because of the short data span this system will no doubt be revised to alleviate negative market conditions that are unforeseen at this time. We will be making changes as the trading system is in use, thus this will be a "Beta System" for the foreseeable future.

It is unlikely that all the asset classes would all go down over a protracted period but it is possible. Since there is no market timing used, the TangoETF Endurance Equity Curve could go down over a protracted period. Thus potentially increasing the Max Drawdown resulting in a loss in equity.

The TangoETF Portfolios make trades based on a computer automated trading system and thus the results will differ slightly from the actual brokerage trades made in real-time. The results are slightly different because the automated trading system uses the "End of Day" data and the brokerage trades are made during the day (not at the end of day).

Typically, the actual brokerage trades are made in the early morning but some are made at various times of the day. This makes the prices paid for computer trades and brokerage trades different. Also, the computer trades have no transaction fee expenses and brokerage trades have all the transaction fee expenses charged by the brokerage, this also makes a slight difference in the two different results. The brokerage trades also have a spread cost that the computer trades do not have. 

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