Dynamic Investments Usher in an Era of More Effective
and Profitable Operations for the Financial Services Industry
Using DIs will certainly improve the returns that individuals investors can achieve without excessive risk. But the use of DIs will also enable financial professionals and financial service organizations to produce superior investment products and services while at the same time exponentially increasing their client base and revenue streams.
Below on this page I show just a few areas of the financial services industry that will benefit significantly from the introduction of Dynamic Investment Theory and Dynamic Investments
Benefits for the Entire Industry
1. Superior Investment Products - DIs were designed specifically to thrive in today's volatile markets. They employ an intelligent buy and sell methodology in order to hold only investments that are moving up in price while selling or avoiding those that are trending down. By doing so they can consistently produce returns that today's "experts" will say are impossible and with low risk. You saw on the Home Page that the NAOI Core DI, the simplest DI possible, earned an an average annual returns of +26.7% during the decade from the start of 2008 to the end of 2017. You also saw that there are an unlimited number of DIs that can be created for a full spectrum of investing goals on this page. The bottom line is that DIT and DIs enable the financial services industry to offer products that are far superior to the MPT portfolios being offered today.
2. A Significantly Larger Client Base - The NAOI works with hundreds of investors on an annual basis in our education classes. We know that people are afraid to risk their financial futures by purchasing portfolios designed by a financial advisor who is also a salesperson. They also are hesitant to risk their savings in a market they don't understand. DIs take this fear away. When the public learns that DIs can produce 20%+ returns with limited risk and absolute protection from market crashes, they will flow into the market in record numbers. Financial organizations that offer DIs will expand their prospect and client base exponentially.
3. Increased Revenues - More and better products, a larger prospect and client base, lower development costs, etc. all translate into increased revenues for organizations that embrace the use of Dynamic Investments and Dynamic Portfolios.
Ease of Creating New Products and Expanding Your Product Line - Creating new ETFs and Mutual Funds is a complicated, time-consuming and expensive process. And the developer is competing against other companies that are creating similar products. DIs are created by simply combining existing ETFs into the NAOI Dynamic Investment Structure. They are easy and inexpensive to create and take very little time. This will enable investment developers and vendors to expand their product lines with powerful new products virtually overnight.
Portfolio Strategists and Designers
Constrained by MPT design methods, Portfolio Designers and Managers today struggle mightily to beat market averages. Adding equities for different asset types, markets and market segments to a portfolio in search of increased returns and lower risk is a guessing game at best. This all changes with the introduction of Dynamic Investments.
Analysis > Select Groups of Equity Candidates > Let the Market choose which to buy
Decisions are not make-or-break like they are today. Mistakes are cut off quick and re-evaluated periodically
Providing Total Investing Solutions
Dynamic Investments will enable Financial Advisors of the future to offer total investing solutions that contain the following components:
Education in the use of Dynamic Investments
Recommending appropriate DIs and/or DI-based portfolios (refer to the DI Products area of the NAOI site)
Offering more comprehensive financial planning education to clients for topics such as savings plans, budgeting, tax planning, retirement plans, social security benefits, insurance, wills, trusts and more.
Bringing together a group of financial specialists and resources (including Web sites) to build a financial "team" for each client
This will be a world in which investing and financial planning will be separate products. Investment advice will be far simpler than it is today. Advisors, or even individuals, will be able to select powerful Dynamic Investments from a "catalog" developed by companies such as the NAOI and others. Not needed will be the effort to determine each individual's risk tolerance level or to sift through reams of market data and analysis to make investment recommendations. DI's let "the market" make buy and sell decisions automatically. The time freed up will go into the second component of what an advisor sells; namely financial planning and this is what the public needs most.
The NAOI sees the role of the Financial Advisor of the future as being that of a total financial solutions provider and a one-stop shop for an individual's financial needs.
Individual investors will be able to clearly see the value-added by an advisor in this role and be willing to pay for this service; unlike the expenses they pay today for items such as "fund management fees" for which they so no value whatsoever. Individuals who have been trained by the NAOI know that no study has ever shown that increased fund expenses correlate positively with increased fund performance.
Simplicity - Dynamic Investments have the universal goal of capturing positive returns that the market offers and avoiding losses. This is a universal goal that works for all investors. Thus, there is no need to customize a DI for any investor. DIs can simply be purchased "off-the-shelf" and held for the long term while the DI automatically signals trades as needed. Thus, DIs eliminate the need for extensive education on such things as risk tolerance, asset allocation, economic analysis, etc. The NAOI supplies the simple education needed to effectively use DIs.
Higher Returns with Less Risk - Dynamic Investments are sensitive to market movements; traditional MPT portfolios are not. DIs automatically sample market trends on a periodic basis in an effort to hold only ETFs that are trending up in price and to avoid or sell those that are trending down. This enables them to capture positive returns where ever and whenever they exist in the market while avoiding losses. MPT portfolios move up and down at the whims of the market.
Absolute Protection from Market Crashes - DIs will automatically sell the ETF owned if its price starts to deteriorate significantly, thus avoiding market crashes like we saw in 2008. Then, when the stock market starts to recover, it automatically buys back in. Eliminating the threat of portfolio crashes will give employees the confidence to participate in their 401(k) Plans without fear.
Automated, Objective Portfolio Management - Investors do not need to be concerned with the ongoing management of the DI or DIs that they own. DIs have the internal intelligence required to detect market trends and signal trades to either capture the positive returns in current markets or to avoid losses. This is done automatically, based on objective observations of market trends and without the need for human judgments. In contrast, traditional MPT portfolios provide no guidance on when to change the equities they hold. MPT portfolio management is totally at the mercy of human judgments which inject a massive risk element into the investing process. This is risk that DIs avoid.
DIs are Portfolio "Products" - DIs are what the financial world has been seeking for decades - portfolio "products". Each DI is created by an NAOI-trained DI Designer and once created the design does not change, although the ETF held does. As a result, DIs can be sold by a variety of vendors via DI "Catalogs" and bought "off-the-shelf" by investors without the need for customization. The investor simply buys and holds a DI for the long-term as it automatically signals trades to either capture gains or avoid losses. When the world of investing is "productized" everything changes for the better!
These factors and others make Dynamic Investments a superior choice over traditional, asset-allocation portfolios in retirement plans of all types. DIs will soon become the standard investment type for all 401(k) Plans. The sooner a 401(k) provider learns about Dynamic Investments, the greater will be their competitive advantage in the future of investing.
Index Creators and Managers
Dynamic Investments open a vast new world of opportunities and sales for index developers and vendors. This page discusses how and why.
Dynamic ETF Pools - used by Dynamic Investments - are Assets!
You have read in the Dynamic Investments area of this site that one component of all DIs is a Dynamic ETF Pool or DEP. The purpose of the DEP is to hold ETF purchase candidates for the DI that it ranks periodically to select and buy the one that is moving up most strongly in current economic conditions. This process gives the DI market sensitivity and enables it to hold only ETFs that are moving up in price at time of purchase and to avoid or sell those that are trending down. This process makes the investment "dynamic." And this is key to producing returns that today's financial "experts" will say are impossible.
Critical to a Dynamic Investment's performance is the list of ETFs placed by a designer in the DI's DEP. To produce top performance a DEP should contain a diverse set of ETFs. A well designed DEP will hold at least one ETF that is moving up in price in any economic environment.
For example, in its simplest form, a DEP should include a Stock-based ETF and a Bond-based ETF, two investments that typically move in opposite directions. The NAOI Basic DI does just this. It holds only a total Stock market and a total Bond market ETF in its DEP and has earned an average return of over 30 % + per year over the past decade as shown on the home page of this site!
Yet there are times when ETFs for other assets, markets and/or market segments are moving up in price more strongly than either a total Stock or Bond market ETF. There are hundreds of ETFs for designers to choose from to create a DEP that captures these returns.
There is no way to calculate which set of ETFs will work best for meeting a DI goal. The only way to find an optimal set of ETFs for a DEP is to test, test and test some more. This makes the discovery of an optimal set of ETFs for a DEP a very valuable asset for the designer / developer.
Optimal Dynamic ETF Pools (DEPS) are Valuable, Proprietary Indexes!
When an optimal set of ETFs is found for a specific investing goal it can be viewed in the same manner as today's standard proprietary Indexes and it may be classified as "intellectual property" of the developer. As such, a "winning" DEP can be a significant source of revenues for its owner who can then license its use to DI designers. With the introduction and widespread use of Dynamic Investments, the meaning of the word "index" is expanded along with the benefits that will accrue to those that create them.
The NAOI is available to consult with existing index managers and sellers to train on how to create this new index type. Click here for more information on how to get started creating Dynamic Investment DEP/Indexes today!
Also if you are an Index Creator, signup to our Email Updates list at the bottom of each page of this site. Get notified first when the NAOI creates new, powerful DEP Indexes. And contact us at any time using the information found here.
Do it yourself is finally a real possibility
Discount brokers today are not close to realizing their full market potential. From teaching thousands of people how to invest, the NAOI knows that only a small percentage of investors use online brokerage services. Most people simply let a financial advisor handle all of their trades for them. In the unnecessarily complex world of investing today very few individuals have either the education or the confidence needed to invest on their own using an online broker. The introduction of Dynamic Investments (DIs) changes this dynamic by shifting power to the average investor and enabling to invest on their own with confidence.
Individuals that read The Dynamic Investment Bible will be able to easily implement and manage Dynamic Investment products on their own without the help of an advisor. As a result, DIs will create a massive new market of self-directed investors who will use online brokers.
Discount brokers that support DIs and offer DI support services will capture this market and increase their customer base exponentially. The successful online brokers of the future will offer the products and services discussed below on this page in addition to their online trading platform.
If you are an online broker, you cannot afford to ignore this major change in the investing world. The NAOI stands ready to show you how to take full advantage of it.
Dynamic Investment Theory Education
The NAOI will work with any online broker to develop education material and resources that will enable individuals to manage Dynamic Investments using their online trading platform. When the public understands DIs they will want to use them instead of, or in addition to, advisor-recommended MPT portfolios. And they will look for an online broker that provides DI support resources and education.
Branded Dynamic Investments and New Revenue Streams
Discount brokers can offer the DIs discussed on this site and in The Dynamic Investment Bible or they may elect to create their own by working with the NAOI. Creating new DIs is simply a matter of combining multiple existing ETFs in the DI structure as described here. The NAOI will work with online brokers to design unique Dynamic Investments that they can they brand as their own proprietary products – creating a major new source of revenue.
An Automated DI Management Process
The successful online broker of the future will also create and offer a DI management system that automatically makes the trades that DIs signal on a periodic basis. The management process is discussed in Chapter 9 of the book. Again, the NAOI will work closely with any online broker via a consulting contract to develop this simple system that will result in a massive competitive advantage in the crowded field of Discount Brokers.
Can finally be taught
In the world of Academia, students are taught how to earn money. But nowhere are they given serious education on how to invest this money to both protect and grow it for the long term. One would think that a course that teaches such a critical life-skill as personal investing would be a requirement for students at every level from high school and up. But it isn’t. Serious and objective personal investing courses simply don't exist as a part of any degreed program. This is a travesty as students enter the workforce almost completely ignorant about investing.
However, I can’t place the blame for this vacuum entirely on academia. The financial establishment has created a world of investing that is so confusing and devoid of logic that it can’t be taught with any degree of academic rigor – it is so filled with subjective human judgments and what I can only call "guessing" that it doesn't even qualify as a legitimate field of study.
Making Academia Relevant in the Investing World
With the introduction of Dynamic Investment Theory, Dynamic Investments and The Dynamic Investment Biblebook, this all changes. The DIT approach to investing is based on the use of scientific methods, objective observations and a set of standardized rules for taking action. As a result, DIT and the use of Dynamic Investments IS a legitimate field of study and taught as such. Courses in Personal Investing now can, and must, be offered to eager students in every high school and institution of higher learning in America.
The NAOI Academic Course Product
The NAOI has developed a comprehensive study curriculum that we are willing to share with any qualified academic institution. NAOI experience shows that this is a course that will be over-subscribed every time it is offered. Conducted by an NAOI-trained instructor, it will be rated by students higher than virtually any other class available. The NAOI can guarantee it!