ETF product lines represent a major asset for organizations that develop and/or sell them. Yet the full value of this asset is not being realized today. This Web Page shows how, by combining existing ETFs in the NAOI Dynamic Investment structure, the value of an existing ETF product line can be increased exponentially; with minimal time, effort and expense. More detailed information is found in the NAOI White Paper entitled “Introducing Dynamic Investments and Market-Sensitive Portfolios” which is now available to you.

The Dynamic Investment Concept

The NAOI will soon release to the market a new investment type called Dynamic Investments (DIs) that are capable of changing the ETFs they hold based on a periodic sampling of market trends. This simple process makes DIs market-sensitive and capable of producing returns that are significantly higher than any standalone ETF or mutual fund in existence today with lower risk, absolute protection from market crashes and no active management required.

The Dynamic Investments Structure

All DIs have the components shown in the following diagram. The use of each is discussed below it.

A DI designer places 2 or more ETFs in the Dynamic ETF Pool (DEP) shown above. These are “candidates” for purchase by the DI. On a periodic basis (e.g. quarterly) the DI reviews the price trends of these ETF and purchases (or holds if already owned) the ONE ETF with the strongest upward price trend since the last Review. This is the ETF held until the next Review when the process is repeated. A Trailing Stop Loss order is placed on the ETF held to protect the DI’s value from significant losses during the time it is held. If a “sell” is triggered the DI stays out of the market until the next Review event, when the DEP is again scanned and an uptrending ETF is selected.

A Simple Example

The diagram below shows an example of how the DI structure and methods create returns that are significantly higher than either of the standalone ETFs placed in the DEP. This is the simplest possible DI that holds only two ETFs in the DEP, one tracking the Stock Market and one tracking a Bond Market. Thus, at any one time, the DI will hold either Stocks or Bonds depending on which asset class is moving up in price the strongest. The selection of which ETF to hold is made based on objective observations of market trends, not on human subjective judgments - removing a massive risk element that holders of MPT-based portfolios must deal with today.

This example clearly shows that this ultra-simple DI produced significantly higher returns than either standalone ETF placed in the DEP. Plus, the performance of this DI was substantially higher than virtually any MPT portfolio during the same period! This is the result of DIs being market-sensitive by taking advantage of the predictive power of market price trends!

Adding more ETFs to the DEP, using rules defined by the NAOI and explained in the White Paper, can significantly increase even the DI returns shown above. We have designed a DI with four ETFs in the DEP that has returned an average of +25% annually for the same period as shown above. How? By giving the DI more areas of the market to search for equity uptrends.

By monetizing ETF combinations, DIs uncover value that is currently lying dormant in existing ETF product lines. And this value is massive.

An Expanded ETF-Based Product Can Be Created Virtually Overnight

The DI structure and methods allow for the creation of an unlimited number of powerful Dynamic Investments that meet a full range of investing goals. Readers of the NAOI White Paper will learn how to easily create optimal DIs for virtually any wealth creation strategy with minimal time, effort or expense. The value of the new DI product line could easily dwarf that of a product line consisting only of standalone ETFs!

The diagram below shows how an ETF-based product line can spawn an even larger product line of powerful DIs. Advisors who read the White Paper and/or are trained by the NAOI will find that using DIs to create and manage investing solutions is far easier and more effective than combining standalone ETFs in an MPT portfolio.

The Product Line of the Future

Dynamic Investments usher in a simpler, more effective and less risky era of investing. In the NAOI White Paper you will learn that DIs open the doors to the development of a wide-range of market-sensitive products as illustrated by the diagram below.

In this diagram the yellow boxes contain investment types that exist today. The green boxes show the new product types enabled by the introduction of Dynamic Investments. The arrows connecting to the bottom blue box represent investment “products” that can be sold directly by ETF creators and investment advisors to the investing public. The circled numbers are used in the White Paper to discuss each element of the product line in more detail. This is the “Investment Product Line of the Future”