This dual momentum sector rotation strategy seeks to optimise risk/return performance during both bull and bear markets.

This strategy employs a rotational discipline providing subscribers with focused exposure to about half a dozen sectors experiencing the most favourable relative strength and stability, while avoiding exposure to those under prolonged duress.

You can automatically make the same trades in your own brokerage account using the Collective2 platform.

Be Choosy When it Comes to Opportunity

Everyone wants to invest in something long-term...but, before it becomes a good long-term trend it needs to be a good short-term trend.

THE DETAILS ARE IN THE DESIGN

This strategy employs a rotational discipline providing subscribers with focused exposure to about half a dozen sectors experiencing the most favourable relative strength and stability, while avoiding exposure to those under prolonged duress. Positions are re-evaluated daily to keep losses to a minimum and take advantage of developing trends. Using Sector SPDR and iShares ETFs for exposure to long-only US equity markets eliminates the risk of single company failure while still retaining better return prospects.

While all sectors are positively correlated the S&P 500 Index (i.e. systematic risk), the correlation of their returns can vary widely. This systematic risk is addressed by liquidating under performing sectors during market rotations, shifting from high-beta to low-beta sectors on market down turns, and rotating to bond ETFs during bear markets. Related sector risk is addressed by avoiding highly correlated sectors and forcing diversity when the market is experiencing higher than normal levels of correlation, which can indicate market topping. While no system can guarantee risk-free or low-risk trading, and while unforeseen events can cause you to lose money, these strategies together make an effort to control risk while always staying in the market.