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, just below a brief explanation of why the Report was written and the significant benefits of reading it.

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 advisors they choose to work with.

I am pleased to welcome you to a Web Page that gives you access to an NAOI Research Report entitled “A Blueprint for the Future of Investing”. This 64-page Report shows how, by using combinations of existing ETFs and the proven 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 can consistently and significantly outperform virtually any standalone ETF or mutual fund in existence today.

The NAOI Research Report shows how DIs work, how they can easily be created/managed and the significant benefits they provide to both investment buyers and sellers. NAOI students who have learned about DIs tell us that this is finally the investment type that will enable them to enter the market with confidence and without fear. And they will search for advisors that offer them.

Why Investing Change Is Needed

The mission of the NAOI is to empower individuals to invest with confidence 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 exposing their savings to the risks related to owning static, MPT-based portfolios in today’s dynamic and volatile markets.

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 buy-and-hold management strategy that it uses neither enables investors to take full advantage of market gains nor does it protect them from significant losses.

Dynamic Investments - The Change Needed

To solve this problem the NAOI began an R&D effort to find an alternative to, or supplement for, MPT; one designed to give investors the investment returns that they want and the loss protections that they absolutely 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 involved.

The Power of Dynamic Investments

The Table below shows the performance of the NAOI-designed “Simple DI” for the period from 2008-2022 compared to the returns of each ETF used and to the performance of a generic 60% Stock/40% Bond MPT portfolio using the same ETFs. At any one time this DI holds either a Total Stock Market ETF or a Long-Term Government Bond ETF as determined by a quarterly sampling of the price trends of each. Only the ETF having the strongest price trend 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. Higher numbers indicate lower risk.

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. The DI is simply held by investors for the long-term while trades are made to take advantage of changing market conditions.

The “Alpha” Dynamic Investment

The Simple DI performance discussed above produced outstanding returns with lower risk in all market conditions; Bull and Bear. However, by rotating among 4 carefully selected ETFs, instead of 2, the “Alpha DI” - designed by the NAOI - delivered even higher performance for the backtest period. Click the button below to view the Alpha DI’s yearly returns and its average annual returns for the period from 2008-2022.

Readers of the NAOI Research Report will learn how the Alpha DI was created, how it works and the specific ETFs used.

Purchase the NAOI Research Report

The link below opens a secure page where you can order the NAOI Research Report. Its cover and Table of Contents are shown below the order link. 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 past.

Introducing Market-Sensitive 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.

Benefits of Using Dynamic Investments and Dynamic Portfolios

The above discussion shows the superior performance of DIs. But this is only one of the many benefits that are made possible by the use of Dynamic Investments and Dynamic Portfolios. Listed below is a sampling of others that readers will learn how to take advantage of in the NAOI Research Report.

1. A Greatly Simplified Investment Product - DIs provide investors with a simple, logical approach to investing that people of all experience levels can understand without extensive financial education. The NAOI knows that this is a major selling point for advisors that offer DIs as many people are reluctant to hold investments that they don’t understand.

2. Higher Returns with Lower Risk - By being market-sensitive DIs consistently provide users with higher returns and lower risk than MPT portfolios in all economic and market conditions; Bear and Bull.

3. Absolute Protection from Market Corrections and Crashes, Lowering Investor Stress Levels - DIs provide users with absolute protection from market crashes; dramatically lowering the stress level of investing in modern volatile markets. This benefit alone will bring thousands of individuals into the market who are now on the sidelines in fear.

4. Objective Trades Signals - DIs have a built-in trading system that signals trades based on objective observations of market data. By doing so they eliminate a significant risk element related to the subjective human judgments used by MPT portfolios to trigger trades.

5. Automated Trades - DIs sample the price trends of each ETF that they work with on a periodic basis and signal trades as needed to hold only uptrending ETFs at all times. This process can easily be automated. Thus, investors can simply buy and hold DIs, confident that their investment is making the trades needed to maximize returns and minimize risk.

6. Ease of Creation - DIs are easily created by simply combining existing ETFs in the DI format and, thus, bypassing the significant time, effort and expense of creating new ETFs and mutual funds.

7. Uncovering Hidden Value in Existing ETF Product Lines - By monetizing ETF combinations, DIs uncover massive value currently lying dormant in existing ETF product lines.

8. MPT Portfolio Enhancement - When used as building blocks in MPT portfolios, DIs both increase their returns and lower their risk. Used in this manner, DIs can be used immediately by advisors with minimal disruption to current offerings.

9. The Use of Five Diversification Elements - Dynamic Portfolios take advantage of FIVE diversification while MPT portfolios use only two. And while MPT diversification elements both lower risk and lower returns, the three additional DIT diversification elements both lower risk and INCREASE returns.

10. Opening a Vast World of Investing Research - By finally stepping outside of the “MPT box” and thinking differently about how portfolios can and should be designed, DIs open a virgin world of investment research. As just one example, they enable a new measure for investment risk that is far more useful than the “volatility” measure in use today.

11. Creation of a Universal Portfolio - DIs enable the creation of a Universal Portfolio that works for all investors regardless of their risk tolerance and testing show that it outperforms most customized MPT portfolio created today. This portfolio is the perfect default investment for retirement plans. And it can be recommended by advisors to less affluent investors without a major investment of time. This a market that is woefully under-served today and the potential it holds is massive. In the NAOI Research Report you will learn how to create, manage and profit from offering the NAOI Universal Portfolio.

12. The Productization of Investing – DIs enable the Productization of Investing – the Holy Grail of the investing world that experts have been seeking for decades. They haven’t found it. The NAOI Research Report shows that the NAOI has. This development will change how investing works at a fundamental level. And those that learn about it first will be positioned to define the future of investing.

Gaining Competitive Advantage

These benefits, and others discussed in the Research Report, give a significant competitive advantage to advisors and financial organizations that include DIs in their product lines.

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 picture 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 those being offered today.

The MPT portfolios offered today won’t be able to compete with DIT/MPT portfolios that will take advantage of this new product line.

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” we use.

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 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.