Welcome to the Web site of the National Association of Online Investors (NAOI). Founded in 1997 by President, Leland Hevner, the NAOI is a market-leading investor education, investment research and financial consulting organization. The NAOI is unique in that it works with both investment buyers and sellers to meet the goals of each.

The NAOI Mission Statement

The NAOI Mission Statement includes two main goals as follows:

1. Empowering Individual Investors. The NAOI seeks to empower individuals to participate in equity markets with confidence, with success and without fear. To do so it provides objective / comprehensive investor education, investor-market research and innovative investment types / portfolio designs.

2. Enabling Investment Developers, Portfolio Designers and Financial Advisors to Better Meet the Goals of Investors. The NAOI shows financial organizations how to design and offer higher-return, lower-risk investment types and portfolios that will give them a massive competitive advantage in a crowded market that will enable them to attract far more clients than they do today.

This Home Page shows provides an overview of how the NAOI meets these goals. Links are provided to access more detailed information for each topic discussed below.

Investor Education

The NAOI was established in 1997 by Leland Hevner to teach individuals how to invest. He saw that this critical life-skill was not being taught in academia at any level and that investors had little choice but to simply accept the portfolios they were given by financial advisors who were also salespeople.

To close this knowledge gap and to give investors better control of their savings, the NAOI has created a variety of education courses that are objective, comprehensive and actionable via the use of online resources.

Since our founding thousands of individuals have taken our online courses, read our published books and/or attended our college classes.

The core NAOI educational offering is the “Individual Investor Certification Program” consisting of 6 course books that students read and then must answer close to 200 questions in an online testing component. Those that pass this test are awarded with the “NAOI Certified Individual Investor Diploma” shown just above. This is the “gold standard” for investor education today. More information related to this program is found at this link.

Investment Innovation

As we teach our students, they teach us. And we know that far too many people who need investing income today are not participating in the market. Why? A major reason is that they are increasingly unwilling to accept the buy-and-hold portfolios offered to them by investment advisors. They see the risk of significant losses when markets crash (an event that happens on an average of every 6 years) as being unacceptable.

At the root of this problems is the universal and unquestioned use of Modern Portfolio Theory (MPT) to design and manage portfolios. MPT was introduced to the market in the 1950s. While markets have evolved significantly since then, MPT methods have barely changed at all. And the buy-and-hold portfolios that this approach creates can no longer cope with the challenges of modern markets.

Introducing “Dynamic Investments” (DIs)

To bring the world of investing into the 21st century and to enable thousands, if not millions, of individuals to participate in the market with confidence and without fear, the NAOI conducted a multi-year R&D effort to find an alternative for, or supplement to, MPT for designing portfolios capable of thriving in modern markets. We succeeded in this effort with the development of a new theory of investing called Dynamic Investment Theory (DIT) and a “market-sensitive” investment type it creates that we call Dynamic Investments (DIs).

Dynamic Investments (DIs) automatically change the ETF they hold based on a periodic sampling of market trends. By purchasing only ETFs moving up in price while avoiding, or quickly selling, ETFs that are trending down, extensive testing shows that DIs produce higher returns with lower risk than virtually any mutual fund, ETF or even MPT portfolio being offered today. And they do so in all market conditions - bear or bull.

More information related to DIT and DIs is found starting at this link and in detail in the NAOI Research Report entitled “The Power of ETF Combinations” pictured nearby. It can be purchased at this link.

The Dynamic Investment (DI) Components

DIs are designed to hold only ETFs that track asset classes and markets/market segments that are moving up in price while avoiding, or quickly selling, those moving down. This makes them market-sensitive and capable of producing positive returns in all market conditions - bear or bull - with reduced risk.

The components of all DIs are listed below. Each is a variable defined by the DI designer. Readers of the above described NAOI Research Report will learn how to easily design an unlimited number of high performance, low risk DIs for a full range of investing goals by selecting the values of these components.

1. Dynamic ETF Pool (the DEP) - Illustrated at right, the DEP is where a DI designer places a combination of ETFs that are “purchase candidates” for the DI they are designing. Typically they are uncorrelated, each thrives in different market conditions - e.g. Stocks and Bonds.

2. Review Period - This is how often the DI reviews the DEP to purchase, or retain if currently held, the ETF moving up most strongly in price. Quarterly and Monthly are common Review Period selections.

3. Trend Indicator - This is the price trend indicator the designer selects to identify the ETF in the DEP moving up most strongly in price. The ETF selected is purchased, or retained, until the next Review Period when the ETF selection process is repeated. A simple and effective indicator is the ETF price increase since the previous Review.

4. Trailing Stop Loss Order (TSL) - A TSL is placed on all ETFs held by the DI. The ETF held will be automatically sold if its price drops by a designer-specified percentage from the highest price it reached while being owned. 10%, 12% and 15% are commonly used sell-triggers. The NAOI recommends that designers place higher TSL sell triggers on ETFs with higher volatility. If a TSL sale is triggered, the DI purchases and holds a cash-equivalent ETF until the next Review when an uptrending ETF from the DEP is purchased.

These simple components make DIs market-sensitive and capable of producing higher returns with lower risk than virtually any buy-and-hold MPT-based portfolio offered by advisors today. Example returns are shown just below. And further down on this page you will see how DIs can be used in today’s MPT portfolios to enhance their performance in all market conditions.

DI Example Returns

NAOI designed Dynamic Investment come in many forms and for a wide variety of investing goals. Below are shown just a few examples of the performance of three DIs compared to the performance of a 60% Stock / 40% Bond Portfolio that is given to most investors today.

The backtest period is from 2008-2024 and the performance figures shown for each of the following examples are the Average Annual Return achieved by each.

It can be seen in the performance tables above that DIs produce significantly higher returns than the traditional 60/40 buy and hold MPT offered to the public today. The reason is that the MPT portfolio holds both winning and losing investments at all times to reduce risk. The DIs are designed to hold only winning ETFs at all times. Risk is reduced by purchasing only ETFs that are uptrending in price while avoiding or quickly selling ETFs that are trending down in price.

The above DIs designed and tested by the NAOI are just three of an unlimited number of DIs that can be created for an unlimited number of investing goals. The NAOI Research Report shown above on this page shows how.

“Dynamic Portfolios”: The Investment Type of the Future

Despite the higher returns and lower risk of DIs, the NAOI is not advocating that MPT portfolios be replaced. There are certainly advantages to a buy and hold strategy. We predict that the dominant investment type of the future will be portfolios that use DIs as building blocks in traditional MPT portfolios as illustrated in the picture just below. We call these Dynamic Portfolios or DPorts for short.

DI enhanced MPT portfolios are “market-sensitive”, enabling them to thrive in all market conditions, unlike static MPT portfolios that move up and down in value with the tides of the market. The NAOI Research Report devotes an entire Section that shows how to build them.

Designers will determine the percent of portfolio money allocated to the DIT and MPT Segments as well as the percent of money allocated to each investment type in the MPT Segment.

DI Catalogs and the “Productization of Investing”

As is presented above, DIs have as their goal maximizing returns while minimizing risk in all market conditions. This is a universal goal that works for all investors, regardless of the risk profile. Thus, well designed DIs can be used by investors as stand-alone portfolios or as building blocks to enhance the performance of any MPT portfolio.

As a result, Dynamic Investments can be viewed as investing “products” that can be sold via investment product catalogs. Thus they usher in the “productization of investing” - the Holy Grail of the investing world that investment developers have been seeking for decades. They haven’t found it. The NAOI has.

Why Dynamic Investments Cannot Be Ignored

DIs and DPort are more than just a “good idea”. The NAOI is currently teaching the use of DI and DPorts throughout our extensive education network. And we are developing curricula that enables academia to finally offer investing classes that are not dependent on any one person’s financial profile.

Students tell us that this is the approach to investing and the investment types that will finally enable them to enter the market with confidence and without fear. And they will search for financial organizations that offer them.

Financial professionals who have peer-reviewed DIs and DPorts agree that there currently exists no simpler, less expensive and more effective way of gaining a significant competitive advantage in a crowded market than by including DIs in their product line.

The bottom line is this: Financial organizations the offer DIs will be able to attract far more clients than those that remain stuck in the increasingly outdated “MPT Box”. They cannot be ignored.

NAOI Partnerships

The NAOI offers Partnerships to financial organizations that share our passion for empowering individuals to invest with confidence, success and without fear.

Based on 25+ years of working with the investing public we have an understanding of what they want and need from financial organizations to participate in the market with confidence and without fear. We share this valuable information with our Partners to enable them to attract far more clients than they do today.

Over the years the NAOI has also gained a sterling reputation as a strong advocate for the individual investor and an organization that is objective and can be trusted. As a result, a Partnership with the NAOI will elevate any financial organization’s “trust-factor” with the investing public. This is a significant competitive advantage in a field where a recent CFA Institute survey showed that only 23% of individual investors completely trust their financial advisor.

More information related to NAOI Partnerships is found at this link.

NAOI Advisory Services

NAOI President Leland Hevner is available to join financial organization Advisory Boards. In this role he draws on his 25+ years of working with the investing public to show organizations how to create marketing plans, investing products and investor solutions that will give them a significant advantage over their competitors. Hevner’s CV is found at this link.

The NAOI is a well-known for assisting and empowering individuals to become successful investors. His presence on an advisory board will give potential clients the assurance that the offerings of a financial organization has been examined and approved by the NAOI.

A Winning Marketing Plan

No organization in the financial market today has a more in-depth understanding of the wants and needs of the investing public than the NAOI.

Using this knowledge the NAOI can help any financial organization gain more clients by not only creating superior investing products but also showing how create a marketing plan that will attract more clients than virtually any of their competitors. We can add to your current market plan an investor education component, higher performance / lower risk investment products and unique portfolio designs are market sensitive and superior to any buy-and-hold, MPT-based portfolio being offered by any competitor.

Let’s Talk

Feel free to contact NAOI President, Leland Hevner directly at LHevner@naoi.org, or on LinkedIn to learn more about NAOI offerings and how we can work together to give your organization a significant competitive advantage in today’s crowded financial services market.

“The Future of Investing Starts Here” is a registered trademark of Leland Hevner and the NAOI.