Hello. My name is Leland Hevner. I am the President of the National Association of Online Investors (NAOI). Founded in 1997, we are a market leading investor-education, investment-research and financial consulting organization. The NAOI is unique in that we work with both investment buyers (our students) and sellers (our consulting clients) to meet the goals of each.

I would like to welcome you to an invitation-only Web page that gives a select group of my LinkedIn contacts pre-release access to a recently completed NAOI Research Report entitled “The Power of ETF Combinations”. Its cover is shown at right.

Written based on a multi-year R&D project by the NAOI, using extensive input from both the investing public and investing professionals, this seminal report introduces an updated approach to portfolio design and management that more effectively copes with modern markets and more effectively copes with modern markets and better meets the goals of both investment buyers and sellers.

Click here to view the report’s Table of Contents.

The 64-page Research Report describes an innovative portfolio design and management methodology called Dynamic Investment Theory (DIT). DIT sets the logic and rules for the creation of a simple but powerful ETF-based investment vehicle called Dynamic Investments (DIs). DIs automatically change the ETF they hold based on a periodic (e.g. quarterly) sampling of asset/market price trends.

By being “market-sensitive”, extensive testing shows that DIs produce returns that are consistently and substantially higher than virtually any standalone ETF or mutual fund being offered today with lower risk. MPT says this is impossible. DIT begs to differ.

Plus, when added as building blocks to today’s buy-and-hold, MPT portfolios, DIs make them market-sensitive and capable of automatically changing their asset allocations to capture gains and avoid losses in all market conditions - bear and bull - with no active management involved.

Order Your “Pre-Release” Copy of the NAOI Research Report Today

Click the button just below to go to a page where you can purchase the NAOI Research Report. Or, for more information, continue reading the content beneath the purchase button to learn how the world of investing is about to change at a fundamental level, the massive benefits this change provides to both investment buyers and sellers how how they can take advantage of these benefits immediately after finishing the Report’s last Section.

The information presented below provides an overview of the content of the NAOI Research Report and shows why and how those who read it will hold a significant competitive advantage in the future of investing.

About the NAOI

The National Association of Online Investors (NAOI) was founded in 1997 with two main goals as follows:

1. To empower individuals to invest with confidence and success via objective investor education, the development of innovative investment types / methods and the use of NAOI-curated online resources.

2. To enable financial organizations, developers and advisors to gain a competitive advantage by creating superior investing portfolios, investing strategies and investor solutions that will enable them attract far more clients than they do today.

It is important to note that the NAOI does not sell ETFs or any other investment type and we are not certified investment advisors. We are investing educators, researchers, “futurists” and consultants. Click the button below to see a diagram of how the NAOI is uniquely positioned to usher in a simpler, safer and more profitable future of investing.

Why a Fundamental Change to Investing Is Needed

As the NAOI teaches our students, they also teach us. As a result we know that far too many people who need investing income today are leaving, or not entering, the market. Why? Because they are afraid of owning the buy-and-hold portfolios recommended to them by advisors in modern uncertain markets. They view the risk of significant losses when markets crash (an event that happens on an average of every 6-7 years) as being just too great. Many see purchasing annuities as a safer option for growing, and protecting, their savings.

At the root of this problem is the market’s exclusive and unquestioned use of Modern Portfolio Theory (MPT) to design and manage portfolios. The MPT approach was introduced in the 1950s when markets were a far different place. While markets have evolved significantly since then, MPT has barely changed at all and the buy-and-hold portfolios it creates neither enable investors to take full advantage of market gains nor to protect their portfolio value from significant losses.

Click the button below to review just a few of the problems of using MPT methods to design and manage portfolios. More are described in the Research Report.

The Change Needed: Market-Sensitive Investments and Portfolios

Input from individuals who told us that they were afraid to accept buy-and-hold, MPT portfolios in today’s geopolitical uncertain markets, prompted the NAOI to initiate an R&D project to find an updated portfolio design and management methodology; one that would more effectively cope with modern markets and better meet the wants/needs of investors than the portfolios they are offered today.

Following a multi-year effort, using extensive input from both the investing public and the financial services industry, the NAOI developed the change needed in the form of a new approach to portfolio design and management called Dynamic Investment Theory (DIT). This MPT alternative sets the rules for the creation of an innovative, ETF-based investment vehicle called Dynamic Investments (DIs).

DIs work with combinations of existing ETFs, each of which thrives in different market conditions. On a periodic basis (e.g. quarterly or monthly) the DI reviews these ETFs and buys, or retains, only the one ETF having the strongest price uptrend. It is then held until the next Review when the selection process is repeated.

By being “market-sensitive”, extensive testing shows that DIs consistently produce higher returns with lower risk – in all market conditions – than any standalone ETF or mutual fund in the market today, with no active management required.

And when used as building blocks in MPT-based portfolios DIs make them market=sensitive as well by automatically adjusting asset/equity allocations to take full advantage of current market trends. We call DI-enhanced MPT portfolios “Dynamic Portfolios” and believe they will be the investment type of choice in the future of investing. They are discussed in more detail below on this page.

The Amazing Benefits of Using Dynamic Investments

Dynamic Investments (DIs) are not simply another investment type like mutual funds or ETFs. DIs are designed using an entirely different approach to investing that we call Dynamic Investment Theory (DIT). This is an MPT-alternative that makes trades based on the objective observations of empirical market data and the proven predictive power of market/asset price trends to make trades. This methodology removes the significant risks related to the subjective human judgments used for this purpose today.

Below are just a few DI benefits that will change the way we invest today at a fundamental level. Each is discussed in far more detail in the NAOI Research Report.

Dynamic Investments:

• Enable the creation of investment products that produce higher returns without higher risk. MPT says this is not possible. DIT shows that it is possible.

• Give investors significantly stronger protection from major losses than virtually any MPT-based portfolio being offered today.

• Can be used as building blocks in MPT portfolios to boost their performance while lowering their risk. By using DIs in this manner advisors can take full advantage of their benefits with minimal disruption to current activities.

• Enable FIVE degrees of portfolio diversification and more are possible. MPT methods use only two. And while MPT diversification elements decrease risk at the expense of decreasing returns, DIT diversification elements decrease risk and increase returns.

• Enable the creation of a “Universal Portfolio” that works for all investors regardless of their risk profile. This is the perfect “default investment” for the retirement market. The NAOI Report shows how financial organizations that offer this portfolio will dominate this multi-billion dollar market.

• Make possible the “Productization of Investing”. This is the Holy Grail of the investing world that financial experts have been seeking for decades. They haven’t found it. With the introduction of DIs, the NAOI has.

• Unlock massive value that is currently lying dormant in ETF product lines by “productizing”, and thus “monetizing”, combinations of existing ETFs in the DI format.

• Significantly increase the size and value of current ETF product lines without the need to create a single new ETF.

• Open the door to a vast and virgin world of new investment products, investing strategies and investor solutions.

• Enables a new field of study that we call “Portfolio Design Science” that uses both fundamental analysis and objective observations of market data to create superior portfolios that are simply not possible today.

To learn more about these benefits and others click the button below. More benefits are found in the Research Report.

The Power of Dynamic Investments (DIs) - An Example

To illustrate the returns potential of Dynamic Investments, the table below shows the performance of a very simple DI designed by the NAOI that rotates only between a Total Stock Market ETF and a carefully selected Long-Term Government Bond ETF for the period from 2008-2022. We call this the “Simple DI”. In the table its performance is compared to the returns of each standalone ETF used by the DI as well as to the returns of a generic 60% Stock / 40% Bond, MPT-based portfolio holding the same ETFs.

At any one time the Simple DI holds either the Stock ETF or the Bond ETF as determined by a quarterly sampling of the price trends of each. The generic 60/40 MPT portfolio holds both ETFs at all times with the allocations shown and rebalanced quarterly. The Sharpe Ratio column in the table is a measure of investment risk - the higher the better.

During this period the Simple DI held the Stock ETF for 2195 days and the Bond ETF for 1582 days. DI trades were automatically signaled by the DI’s built-in trading system that can easily be automated so no active management is required. Thus, this DIs can be bought and held by investors for the long-term while they automatically make trades to take advantage of changing market conditions.

You can see in the table that this ultra-simple DI produced returns that were close to double that of the generic MPT portfolio and with lower risk. And It did so during a backtest period (2008-2022) that saw two significant market crashes and an unprecedented bull-market run.

The “Alpha” Dynamic Investment: 20%+ Annual Returns from 2008-2022

The “Simple DI” discussed above produced outstanding returns with lower risk than virtually any MPT portfolio. However, by rotating among FOUR ETFs, instead of two, another NAOI-designed DI called the “Alpha DI” delivered even higher performance for the 2008-2022 backtest period. Click the button below to view its yearly returns and average annual return for this period. The higher returns achieved by simply adding 2 additional ETF purchase candidates to the Simple DI are amazing.

Readers of the NAOI Research Report will learn how the Alpha DI was created, how it is managed and the specific ETFs it uses. This is only one example of a high-performance DI design. The Research Report gives readers the knowledge and tools needed to design an unlimited number of others for a full range of investing goals.

The Power of Dynamic Portfolios (DPorts)

As mentioned above, while a single DI can be used as a total portfolio, the NAOI is not advocating that DIs replace MPT portfolios. They work quite well together. When used as building blocks in MPT portfolios, DIs make them market-sensitive and, by doing so, both reduce the portfolio’s risk and boost their returns in all market conditions. We call DI-enhanced MPT portfolios Dynamic Portfolios (DPorts).

A DI-Enhanced MPT Portfolio Configuration

The diagram below shows an example of how a DI building-block can be used to boost the performance of an MPT-based portfolio. The DI could be the “Simple DI” or the “Alpha DI”, as discussed above on this page, or another created by portfolio designers who have learned how to do so by reading the NAOI Research Report. The number of configurations is limitless.

DI building block(s) make MPT portfolios “dynamic” and both enhance returns while also lowering risk. The degree to which it does so is dependent on the allocation of money to the Dynamic Investment Segment.

Using DIs as MPT-portfolio building-blocks is a simple way for advisors and portfolio designers to take advantage of DI benefits immediately, without significant disruption to current activities.

A New “Universal Portfolio” Configuration - The 30/20/50 Portfolio

The world of investing today suffers greatly from the lack of a simple, but profitable, portfolio that works for all investors regardless of their risk profile.

The NAOI believes that today’s generic 60% Stock/ 40% Bond MPT Portfolio is dead; we no longer teach it to our students. Instead, we are now teaching the benefits of a 30% Stock / 20% Bond / 50% Dynamic Investment configuration as shown in the diagram below. It holds both a Modern Portfolio Theory (MPT) Segment, using a buy-and-hold strategy, and a Dynamic Investment Theory (DIT) Segment, using a buy-and-sell management strategy.

This very simple DPort works with only three ETFs: a Total Stock Market ETF, a Long-Tern Government Bond ETF and a Cash-Equivalent ETF. The MPT Segment holds 30% Stocks and 20% Bonds at all times, rebalanced quarterly. The DIT Segment holds either 100% Stocks or 100% Bonds or a 100% Cash Equivalent ETF at all times depending on the price trend of each at a quarterly review. Thus, the following portfolio allocations occur automatically at a periodic review:

• When Stocks are trending up the DPort holds 80% Stocks and 20% Bonds.

• When Stocks are trending down the DPort holds 30% Stocks and 70% Bonds.

• When both Stocks and Bonds are trending down (as they did in 2022 when MPT portfolios were decimated) the DPort holds 30% Stocks, 20% Bonds and 50% Cash.

Automated Portfolio Rebalancing

You can see that Dynamic Portfolios eliminate the the almost impossible task of determining an optimal time period for rebalancing the buy-and-hold portfolios being offered today.

The Universal Portfolio Returns

From 2008 - 2022 this DPort earned an average annual return of +11.95% while a generic 60/40 MPT portfolio produced an average annual return of +8.3%. And it did so with stronger protection from significant losses. The NAOI Research Report shows how this simple “Universal Portfolio” is designed and how it opens the doors to the productization of investing - as discussed just below on this page.

Revolutionizing the Retirement Investment Industry

As just one example of the Universal Portfolio’s use, it is the perfect default investment type for all retirement accounts. It is far more profitable and less risky than the outdated Target Date funds used for this purpose today. Advisors and financial organizations that offer this retirement portfolio will dominate the multi-billion dollar retirement market. The Research Report shows how.

The Effects of Segment Allocations

While the DPort configuration shown above meets the needs of most investors, its performance can be changed by simply adjusting the allocation of money to each Segment. The table below shows how increasing the allocation of portfolio money to the DIT segment increases returns.

It is important to note that the DIT segment of this portfolio is absolutely protected from market crashes via the use of a Trailing Stop Loss Order placed on the ETF being held. This benefit by itself, if properly marketed, will enable advisors to attract far more clients than they do today.

The Productization of Investing

As can be seen from the above examples, DIs and DPorts are designed with the goal of maximizing returns while minimizing risk in all market conditions. This is a goal that works for all investors, regardless of their risk profile. As a result DIs do not require customization for each investor. Thus, they can be viewed and used as “investing products” that can be sold off-the-shelf to the investing public.

The “productization of investing” - is the Holy Grail of the financial world that experts have been seeking for. decades. They haven’t found it, the NAOI has. And this changes everything in the world of investing. The NAOI Research Report shows massive the benefits of this evolutionary development.

The Investment Product-Line of the Future

With the introduction of DIs and DPorts the investment product-line of the future opens a vast new world of investing research and enables the creation of superior investment products, investing strategies and wealth-creation solutions that are not possible today. Advisors that offer them will hold a massive advantage over competitors who remain stuck in the 1950s-era,”MPT Box”.

The diagram below shows the expanded components of the “The Investment Product-Line of the Future”. Click the button below it to see an explanation of each. With this new set of “investing tools” a vast and virgin world of investing research and superior products opens its doors. This is a world in which even a basic concept such as how investment-risk is measured today will be questioned and replaced.

There Will Be Skeptics

The NAOI is well aware that any change in the financial world as significant and potentially disruptive as the introduction of Dynamic Investment Theory, Dynamic Investments and Dynamic Portfolios will meet resistance. Click the button below to read several criticisms of this new approach by investing professionals who have peer-reviewed this new approach along with our response to each. No criticism that we have heard to-date has survived close scrutiny.

Why DIT Methods and the DI Investment Type Cannot Be Ignored

Dynamic Investments and Dynamic Portfolios are more than just a “good idea”. The NAOI has been teaching their use throughout our extensive education network for over two years and demand for this new approach is growing fast.

The DI User’s Manual, shown at right, is the “textbook” used by the NAOI to teach our students how DIs work, how to easily create them and the benefits of including them in their portfolios. We also show students how to create and manage DIs on their own, without an advisor, by using an online broker to make the trades that DIs signal. But the NAOI suggests that students first look for an advisor that offers DIs and DPorts. We will provide them with a list of those that do.

Investing professionals will soon be asked by potential clients if they offer Dynamic Investments. To answer their questions the NAOI is making the Dynamic Investment User’s Manual shown at right available to advisors via the links provided just below. You can order just the User’s Manual or both the User’s Manual and the NAOI Research Report together, at a discounted price, by clicking the second link shown below.

Click Here to Order the DI User’s Manual shown above at right>>

Or Click Here to Order Both the Research Report and the User’s Manual>>

The Benefits of Working with the NAOI

Readers of the NAOI Research Report will be able to create and use DIs and DPorts immediately after finishing the Report’s final Section. However, advisors and financial organizations that work with the NAOI to design optimal DIs and DPorts and bring them to the market first with a highly effective marketing campaign created with input from the NAOI, will benefit the most. The types of cooperative agreements offered by the NAOI are discussed in the Research Report. A summary of these is found by clicking the button below.

Still Have Questions or Need More Information? Let’s Talk.

The NAOI’s constant interaction with the both individual and institutional investment buyers shows us that it is time for the investing world to evolve from the 1950s, when MPT was introduced, to the 21st Century. Dynamic Investment Theory and DIs are the evolutionary change needed. And financial organizations that offer this updated approach to portfolio design and management first will benefit the most.

If you are skeptical of this new approach, have questions about it or simply need more information, feel free contact “Leland Hevner” on LinkedIn or directly at LHevner@naoi.org and let’s talk. If emailing please place NAOI REPORT in the subject line of the email.