The NAOI Research Report entitled “A Blueprint for the Future of Investing” can be accessed via a link found by scrolling down on this page, following a brief explanation of why the Research Report was written and the significant benefits that will accrue to those who read and take action based on the information it presents.

Welcome

My name is Leland Hevner. I am the President of the National Association of Online Investors (NAOI), the market’s premier provider of objective investing education to the public and a major influencer on how thousands of people make investing decisions - including the investment advisors they choose work with.

I am pleased to welcome you to an invitation-only Web Page that gives you pre-release access to an NAOI Research Report entitled “A Blueprint for the Future of Investing”. This 64-page Report shows how, by taking full advantage of the unique features of ETFs in conjunction with the predictive power of market trends, the NAOI has created a new “market-sensitive” investment type called Dynamic Investments (DIs). Extensive testing has shown that DIs are capable of consistently and significantly outperforming virtually any standalone ETF or mutual fund in existence today.

Why Investing Change Is Needed

The mission of the NAOI is to empower individuals to invest with confidence and success via education, innovation and the use of online resources. Since our founding in 1997 thousands of individuals have taken our online courses, read our books and/or attended our college classes.

As we teach our students, they also teach us. And we know that far too many people who need investing income are not participating in the market today. Why? Because they are afraid of owning the buy-and-hold portfolios they are offered in today’s volatile markets. They view the risk of losing significant losses when markets crash (an event that happens on an average of every 6-7 years) as being just too great.

At the root of this problem is the unquestioned use of Modern Portfolio Theory (MPT) to design and manage portfolios. This is an approach introduced to the market in the 1950s. While markets have evolved significantly since then, MPT has barely changed at all and the static, buy-and-hold portfolios it creates neither enable investors to take full advantage of market price uptrends nor to protect them from downtrends.

Dynamic Investments - The Change Needed

To solve this problem the NAOI began an R&D project to find an alternative to, or supplement for, MPT; one designed to give investors the investment returns they want and the protection from significant losses they need.

Following a multi-year effort, NAOI researchers discovered the change needed in the form of a new approach to investing called Dynamic Investment Theory (DIT) and a new ETF-based investment type that DIT creates called Dynamic Investments (DIs). Developed using extensive input from the investing public, DIs automatically change the ETFs they hold based on a periodic sampling of market trends. This makes them “market-sensitive” and capable of producing higher returns, with lower risk - in both Bull and Bear markets - than virtually any investment type being offered today. And they do so with no active management required.

The Power of Dynamic Investments

The table below shows the performance of a very simple DI, designed by the NAOI, that rotates between only a Total Stock Market ETF and a Government Bond ETF for the period 2008-2022. The DI’s performance is compared to the returns of each ETF used by the DI as well as to that of a generic 60% Stock / 40% Bond MPT portfolio using the same ETFs. At any one time this DI holds either the Stock ETF or the Bond ETF as determined by a quarterly sampling of the price trends of each. Only the ETF having the strongest price uptrend during the past quarter is purchased, or retained if already owned, and held until the next quarterly review. The Sharpe Ratio shown 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. Trades were automatically signaled by the DI’s built-in trading system that can easily be automated so no active management is required. Thus, the DI can be bought and held by investors for the long-term while it signals trades to take advantage of changing market conditions. You can see that the new DI management approach produced far more value from the ETFs used than the decades old buy-and-hold MPT management approach. And it did so with less risk during a period that included a major market crash and multiple significant market corrections.

The “Alpha” Dynamic Investment

The Simple DI performance discussed above produced outstanding returns with lower risk in all market conditions. However, by rotating among FOUR carefully selected ETFs, instead of the two used by the Simple DI, the NAOI-designed “Alpha DI” delivered even higher performance for the backtest period. Click the button below to view its yearly returns and its average annual returns for the period from 2008-2022. You will be amazed.

Readers of the NAOI Research Report will learn how the Alpha DI was created, how it works and the specific ETFs used. But this is only one example of a DI design. Because DIs are built by simply combining existing ETFs in the DI format, a full product line of high-performance DIs can be created with less time, effort and expense than required today to bring a single new ETF or mutual fund to market.

The “Game-Changing” Benefits Enabled by Dynamic Investments

The above discussion shows the superior performance of DIs. But there are many other benefits that are made possible by the use of Dynamic Investments. Just a few of these benefits are listed below.

• DIs are easily created by simply combining existing ETFs in the DI format, bypassing the significant time, effort and costs of creating new ETFs and mutual funds

• By monetizing ETF combinations, DIs uncover massive value that is currently lying dormant in an existing ETF product line.

• When used as building blocks in MPT portfolios, DIs both increase their returns while lowering their risk by adding a market-sensitive component to otherwise static portfolios.

• DIs enable the “productization of investing”, the Holy Grail of the financial world.

Click the button below to see more benefits.

Purchase the NAOI Research Report

The link below opens a secure page where you can order the NAOI Research Report. Its cover is shown below along with its Table of Contents. To view a larger image of the Table of Contents click anywhere on the picture.

Click here to open a Web Page where you can purchase the NAOI Research Report >>

Still Not Convinced?

If you continue to believe that using 1950s-era MPT methods are the best possible approach for portfolio design and management in modern markets, I urge you to read the information presented below on this page. Here you will find selected information from the NAOI Research Report that shows how and why Dynamic Investments and Dynamic Portfolios will quickly become the investment types of choice in the future of investing. And why advisors and organizations that offer them first will hold a significant competitive advantage over those who remain “stuck” in the MPT-only past.

Introducing Dynamic Portfolios (DPorts)

While standalone DIs can be used as total portfolios, the NAOI is not advocating that DIs replace MPT portfolios; the two approaches work quite well together. When used as building blocks in MPT portfolios, DIs make them market-sensitive and, by doing so, both reduce their risk and boost their returns in all market conditions. We call DI-enhanced MPT portfolios Dynamic Portfolios (DPorts).

An Example DPort Configuration

The following diagram shows the format of a generic DPort. It consists of a Dynamic Investment Theory (DIT) Segment using a buy-and-sell management strategy, and a Modern Portfolio Theory (MPT) Segment using a buy-and-hold strategy. DPort designers determine the percent allocations of money to each Segment.

This very simple DPort works with only two ETFs, a Total Stock Market ETF and a Long-Tern Government Bond ETF. The MPT Segment of this DPort is designed to hold 30% Stocks and 20% Bonds at all times while the DIT Segment holds either 100% Stocks or 100% Bonds, depending on the price trends of each, . Thus, when Stocks are trending up the DPort will hold 80% Stocks and 20% Bonds. When Stocks are trending down it will hold 30% Stocks and 70% Bonds. This change is made automatically by the DI’s built-in trading system.

From 2008 - 2022 this DPort earned an average annual return of +12% while a generic 60/40 MPT portfolio was producing an average annual return of just over +8%. And the DPort did so with lower risk. The table below show that the DPort returns increase with the percentage of money allocated to the DIT Segment. An entire section of the NAOI Research Report discusses how DPorts are designed to meet a variety of investing goals and the benefits they provide that are impossible using MPT methods.

The market-sensitivity of a DPort is determined by the portfolio designer via allocations to each Segment.

The Investment Product Line of the Future

With the introduction of DIs and DPorts the world of investing changes at a fundamental level by enabling the expanded investment product line illustrated in the diagram below. This unique product line enables the quick and easy creation of an unlimited number of superior products and an explosion of new wealth creation solutions that can outperform any being offered today.

Demand for Dynamic Investments and Portfolios Is Growing Fast

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 three years and the public’s demand for them is growing fast. The DI User’s Manual, shown at right, is the “textbook” used to show individuals how DIs work and how they can benefit by including them in their portfolios.

If, as an investing professional, you would like to see what we are teaching to the investing public and be prepared for to discuss DIs with clients and/or prospective clients that request them, the User’s Manual is available to you via the link just below. Or you can order 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 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 immediately after reading the Report’s final Section. However, investing professionals who work with the NAOI to build optimal DI and DPort investment products will profit from this new investing approach significantly faster and more effectively than those who work on their own. More information about types of NAOI cooperation is found at the links presented just below

NAOI Consulting and Advising >>

NAOI Strategic Partnerships >>

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

Based on 20+ years of working in the financial services industry, the NAOI realizes that fundamental change of the nature described on this Web page and in the NAOI Research Report will not be easily accepted by many who have been told that MPT is the ONLY acceptable approach to portfolio design and management. If you are skeptical about the value of offering and using Dynamic Investments and Dynamic Portfolios feel free contact me on LinkedIn (search for Leland Hevner) or directly at LHevner@naoi.org and let’s talk.