Designing a Better Future of Investing
Welcome to the Web Site of the National Association of Online Investors (NAOI), an organization that is quietly changing the way investing works at a fundamental level. Change comes in the form Dynamic Investment Theory (DIT), the first viable alternative to portfolio design since today's standard, Modern Portfolio Theory (MPT) was introduced in 1952.
DIT creates Dynamic Investments (DIs), a revolutionary investment type that is "market-sensitive" - capable of changing the equities it holds based on a periodic sampling of market trends. By doing so, DIs are capable of producing returns that are significantly higher than virtually any MPT portfolio working with the same equities for the same time period. This is the change that will enable millions of individuals, who are currently sitting on the investing sidelines in fear, to participate in the market with confidence
In addition to getting to know the NAOI on this site, you will learn about the new approach to investing here. And you will see how by "thinking differently" the NAOI is changing the way we invest dramatically; and for the better. This is change that cannot be ignored.
A Choice for Proceeding
If your interest lies mainly with how NAOI Dynamic Investments work you can go directly to a Web-based slideshow that gives you this information in the most efficient manner by clicking here.
Hello, my name is Leland Hevner, President of the National Association of Online Investors. I founded the NAOI in 1997 with the mission of empowering individuals to invest with confidence and success via objective, comprehensive, academically rigorous education and the use of online resources. Thousands of individuals have read our books, taken our online courses and or attended our college classroom courses. We are also the creators and sponsors of the NAOI “Individual Investor Certification” Program.
For over a decade we taught students how to create investment portfolios based on a design approach called Modern Portfolio Theory (MPT). This methodology calls for portfolios to be customized for each investor to match their risk profiles via asset allocation. Then they are to be held for the long-term with perhaps an occasional review to revert to the original asset allocations. This was, and is today, the unquestioned industry standard for portfolio design. If you hold an investment portfolio it was most certainly designed using MPT methods.
2008 - The Year Everything Changed
Business was good for the NAOI until the end of 2008 when I shut down all NAOI education activities. In that year the stock market started to crash and the MPT portfolio we were teaching our students to create crashed with it. We had to come to grips with the fact 1950’s era MPT methods could not cope with 21st century markets and we were doing our students a disservice by teaching them. It was apparent to us that more than education was needed to meet our mission of empowering investors, also needed was innovation. At that point I refocused NAOI resource from education to research with the goal being to find a better approach to portfolio design.
The Discovery of Dynamic Investment Theory - A “Game-Changer”
Following a multi-year research and development project we met our goal with the discovery of Dynamic Investment Theory and the new investment type it creates that we call Dynamic Investments (DIs). DIs are market-sensitive investments that automatically change the equities they hold based on a periodic sampling of market price trends. By doing so they are capable of producing returns that are significantly higher than almost any MPT portfolio during the same time period and with lower risk.
For example, the Table below shows the performance of a traditional MPT portfolio holding both a Stock and a Bond Exchange Traded Fund (ETF) with the allocations shown and the simplest NAOI “Core” Dynamic Investment, working with the same ETFs but managed differently, during the eleven year period from 2008 to 2018. Shown for each investment type are Average Annual Returns along with the Sharpe Ratio which is a measure of how much return was gained for each unit of risk taken - and the higher the better.
The Core DI performance is amazing. What’s even more amazing is that it was produced based on the periodic observation of objective market data, not on subjective human judgments. And, the DI management process is so simple that any investor, with minimal NAOI training, can perform it on their own using an online broker. This is a game-changer in the world of investing.
A Journey Into the Future of Investing
This Web site tells you all about the National Association of Online Investors and how we are shaping the future of investing. You can go to pages of interest using the Navigation Bar at the top of the page. Or you can view a structured Web-based slideshow that walks you through the development and use of Dynamic Investments by clicking here.
Whether you are an individual investor or a financial professional, devoting time to reading the pages that follow in this presentation can be among the best investments you will ever make. Change is coming fast to the investing industry and those who learn about it first will benefit the most.
The NAOI teaches individual investors how to use Dynamic Investments and teaches professionals how to create and sell them. For the financial services industry also go to the Consulting Area of this site.
For Purchasers of “The Perfect Portfolio” Book
If you reached this page by way of "The Perfect Portfolio" book written by Leland Hevner and published by Wiley, you can find the online calculators and worksheets referenced in the book at this link.