While investors are happy making money, they are even more unhappy losing money

A tactical investment style recognizes the dynamic nature of the financial markets.  This method is different from the more commonly used strategic asset allocation.  Instead of rebalancing your portfolio on a quarterly or semi-annual basis to a preset asset allocation, Weatherstone will monitor your investments as frequently as daily and adjust the asset allocation as needed.  This approach incorporates a buy and sell discipline with the goal of reducing the severity of market losses while still allowing the portfolios to shift into the markets to participate in the advances.  This investment style is appropriate for investors who may be risk adverse, have a shorter time horizon for the money, or who chooses to use this portion to hedge other investments.

 

Balanced Growth
The goal of Weatherstone Capital Managements Balanced Growth program is to provide long-term growth of capital from a portfolio of stocks and bonds that is diversified across four tactical investment strategies.

Each strategy determines a portion of the investment allocation and directs the allocation between stocks, bonds and cash. The strategies used are; 1) relative strength, which looks for the investment sector or style that has the highest probability of outperforming over the next several weeks or months; 2) seasonality, which looks at the impact of seasonal cash flows in and out of the financial markets; 3) coherent styles and sectors, this strategy looks for areas of the markets that have entered into long-term sustainable up trends that are generally not influenced by the direction of the overall financial markets; and 4) tactical money managers. This strategy evaluates and holds mutual funds that are managed in a strategic manner and have the potential to rapidly adjust their asset allocation in response to changing market conditions.

Under Normal market conditions 35% of the portfolio will be invested in bonds. The bond portion of the portfolio can be invested in government bonds, high yield bonds, money market funds or real estate funds if conditions warrant.


ASSET ALLOCATION  

Loading…
 

Please click here to review complete disclosures related to the asset allocation diagram.

Diversified Growth
The Diversified Growth program seeks to provide long-term growth of capital from a portfolio that is typically invested 100% in stocks during normal market conditions, but because of the active monitoring of the program, has the ability to change the asset allocation in response to changing market conditions. It is typically diversified across four tactical investment strategies.

Each strategy determines a portion of the investment allocation and directs the allocation between stocks and the money market funds. The strategies used are; 1) relative strength, which looks for the investment sector or style that has the highest probability of outperforming over the next several weeks or months; 2) seasonality, which looks at the impact of seasonal cash flows in and out of the financial markets; 3) coherent styles and sectors, this strategy looks for areas of the markets that have entered into long-term sustainable up trends that are generally not influenced by the direction of the overall financial markets; and 4) tactical money managers. This strategy evaluates and holds mutual funds that are managed in a strategic manner and have the potential to rapidly adjust their asset allocation in response to changing market conditions.

The program is well suited for investors who wish to target the long-term growth rates generated by stocks, but with less volatility than is found in using a traditional buy-and-hold investment strategy.


ASSET ALLOCATION  

Loading…
 

Please click here to review complete disclosures related to the asset allocation diagram.

Focused Growth
The Focused Growth Program is a non-diversified investment strategy that invests in style and sector focused mutual funds that have the potential to outperform competing investments over an intermediate-term basis. Investments are chosen using two different screening strategies.The first strategy looks at intermediate-term relative strength analysis using a combination of neural network based genetic algorithms and quantitative relative strength and momentum rankings. The second strategy looks for styles or sectors that have entered a coherent bullish stage of price appreciation characterized by above-average returns with below-average volatility. Additional screening is done using various technical filters.This program will typically be fully invested in equities; however, during periods of market weakness, money market funds and “bear” funds may be utilized.


ASSET ALLOCATION  

Loading…
 

Please click here to review complete disclosures related to the asset allocation diagram.

Sector Rotation
The objective of the Sector Rotation Program is to tactically alter equity exposure across 10 industry sectors, basedupon quantitative models. The primary econometric, quantitative model evaluates factors such as the overall economy,fundamental variables that measure relative value of various equity markets versus bonds, risk metrics which aredesigned to capture the level of uncertainty in the markets, and technical factors such as momentum and marketconviction metrics which are used to quantify the strength of market movements.When a sector model is on a “buy” 10% of the portfolio will be allocated to that sector. On a “sell” there is a 0%weighting to the sector and the money is allocated either to a money market fund or one of six bond asset classes.


ASSET ALLOCATION  

Loading…
 

Please click here to review complete disclosures related to the asset allocation diagram.

Country Rotation
The objective of the Country Rotation Program is to maximize opportunity with defined risk controls by trying to consistently investin those countries around the world that have strong-risk-adjusted performance potential. The strategy assesses marketconditions across 20 countries, including several emerging markets. It uses an econometric multifactor model based on economic,fundamental, risk and technical analysis that evaluates the risk-adjusted potential of investing in a country’s equity market versusfixed income. If the expected return per unit of risk for the country is less favorable than that of a fixed income alternative, thepotential 5% allocation for each country is deployed to the actively managed fixed income portion of the portfolio.


ASSET ALLOCATION  

Loading…
 

Please click here to review complete disclosures related to the asset allocation diagram.

Tactical Market Index Growth
The Tactical Market Index Growth program is designed for investors who want broad-based exposure to the U.S. stock market index with a risk management strategy that can disengage from the market during periods historically deemed negative. Risk measurement models primarily evaluate factors such as the number of sectors and industries moving higher or lower, the number of advancing or declining global markets and the relative performance of asset classes like bonds, commodities and cash. Also considered–but at a lower weight–are monetary factors such as trends ininterest rates and changes in money supply, and the amount of optimism or pessimism expressed by market participants. Seasonal factors that historically influence changes in the amount of cash flowing into the stock market and levels of volatility that vary during times of the year are also considered.


ASSET ALLOCATION  

Loading…
 

Please click here to review complete disclosures related to the asset allocation diagram.

Tactical Market Index Moderate
The Tactical Market Index Moderate program is designed for investors who want broad-based exposure to the U.S. stock market index as well as a risk-management strategy that can disengage from the market during periods historically deemed negative or when the strategy declines beyond a predetermined level. Models used to measure this risk evaluate factors such as the number of sectors and industries moving higher or lower, the number of global markets advancing or declining, and the relative performance of asset classes such as bonds, commodities and cash. Also considered, but at a lower weight, are monetary factors such as trends in interest rates and changes in money supply, and attitudinal elements such as the optimism or pessimism of market participants. Seasonal factors that historically influence changes in the amount of cash flowing into the stock market and levels of volatility that vary during times of the year are also taken into account.


ASSET ALLOCATION  

Loading…
 

Please click here to review complete disclosures related to the asset allocation diagram.

International Tactical Growth
The International Tactical Growth program is designed for investors who want broad-based exposure to stocks in developed foreign countries. With a risk management strategy that evaluates risk on a weekly basis, it can also move out of the investments during market environments historically deemed negative by our risk measurement models. During the periods when the risk measurement models show above-average risk, the assets will be allocated to intermediate-term U.S. Treasury notes. The risk measurement models primarily evaluate factors such as the number of international markets moving higher or lower, the performance of foreign stocks relative to other competing investments assets, the performance of emerging markets relative to developed markets, and the strength or weakness of stock markets across regions of the world.


ASSET ALLOCATION  

Loading…
 

Please click here to review complete disclosures related to the asset allocation diagram.

International Tactical Growth Currency Hedged
The International Tactical Growth Hedged program is designed for investors who want broad-based exposure to stocks in developed foreign countries. With a risk management strategy that evaluates risk on a weekly basis, it can also move out of the investments during market environments historically deemed negative by our risk measurement models. During the periods when the risk measurement models show above-average risk, the assets will be allocated to intermediate-term U.S. Treasury notes. The risk measurement models primarily evaluate factors such as the number of international markets moving higher or lower, the performance of foreign stocks relative to other competing investments assets, the performance of emerging markets relative to developed markets, and the strength or weakness of stock markets acrossregions of the world.The program uses broad-based currency-hedged exchange traded mutual funds (ETF) or traditional mutual funds to achieve diversified international equity exposure. When the risk measurement models show elevated amounts of potential risk in foreign markets, some or all of the holding will be allocated to an intermediate-term U.S. government bond exchange traded mutual fund (ETF) or traditional government bond mutual fund, depending on the number of negative readings reflected in our models. The models in the program are updated on a weekly basis and based upon the number of positive or negative readings, we typically adjust the program up to 100% in stocks, or 100% in bonds. The international fund that we use in this strategy does hedge currency exposure, so that the impact the U.S. dollar fluctuation relative to other currencies is minimized. For those investors wishing to have unhedged currency exposure, please see our International Tactical Growth Unhedged program.


Tactical Market Index Growth SRI
The Tactical Market Index Socially Responsible Growth program is designed for investors who want broad-based exposure to the U.S. stock market using an index of socially responsible companies, and an active risk management strategy that can disengage from the market during periods historically deemed negative or when the strategy declines beyond a predetermined level. Models used to measure investment risk evaluate factors such as the number of sectors and industries moving higher or lower, the number of global markets advancing or declining, and the relative performance of asset classes such as bonds, commodities and cash. Also considered, but at a lower weight, are monetary factors such as trends in interest rates and changes in money supply, and attitudinal elements such as the level of optimism or pessimism of market participants. Seasonal factors that historically influence changes in the amount of cash flowing into the stock market and levels of volatility that vary during times of the year are also taken into account.The program uses a broad-based socially screened index fund to achieve the needed level of equity exposure. When risk measurement models show elevated amounts of potential risk in the markets, some or all of the holdings will be allocated to intermediate-term government bonds or cash, depending on the number of negative readings. The models in the program are updated on both weekly and monthly intervals and can adjust the program up to 100%.