The financial services industry has never seen an investment type like Dynamic Investments (DIs). Are they “standalone equities” or are they complete “investment portfolios”? With DIs, the lines blur; they can be used as either or both. This is due to the fact that DIs are created using a totally different approach to investment design and management; one that takes advantage of the unique features of ETFs and the proven predictive power of market trends.

Below on this Web page are listed just a few of the unique features of DIs that make them far more powerful than any ETF or mutual fund being offered today. More unique DI features are found in the NAOI Research Report.

DIs are Easy to Create

Creating new, unique ETFs or mutual funds is difficult, time consuming and costly. In contrast, DIs are created by simply combining existing ETFs in the DI format. An entire product line of DIs for a full range of investing goals can be created in a very short time using the guidelines discussed in the NAOI Research Report.

DIs are Easy to Manage

DIs are designed with a built-in management system. Each has a Dynamic ETF Pool (DEP) where a designer places from 2-5 ETFs that are the DI’s “purchase candidates”. Periodically (e.g. quarterly) the DI reviews these ETFs to detect which has the strongest upward price trend. This is the ETF that the DI buys, or retains, and holds until the next periodic review. Because there are no subjective judgments in the ETF selection process, it can easily be automated so no active management is required. As a result, DIs can simply be bought-and-held for the long-term while the ETF it holds changes to take advantage of current market conditions.

DIs Produce Higher Returns than Standalone ETFs or Mutual Funds

Because DIs only hold ETFs that are trending up at time of purchase, extensive testing shows that they consistently, and significantly produce higher returns than virtually any standalone ETF or mutual fund being offered today. As an example, a very simply DI designed by the NAOI that rotates only between a Total Stock Market ETF and a Long-Term Government Bond ETF based on a quarterly review of the price trend of each, earned +15% per year for the period from 2008-2022. This is a period that experienced major market crashes/corrections and an unprecedented bull run. The DI was able to profit in both.

DIs Provide Stronger Loss Protection than Standalone ETFs or Mutual Funds

DIs are protected from significant losses using two factors. First, the ETF held is changed if another ETF in the DI’s DEP is moving up more strongly in price at a periodic review. Second, a Trailing Stop Loss (TSL) order is placed on each ETF held by the DI. The TSL automatically sells the ETF if its price drops by a significant amount, as determined by the DI designer, during the short period it is held between reviews. A 10% drop is commonly used. If the TSL is triggered and the ETF sold, the DI holds a cash-equivalent ETF until the next review at which time an uptrending ETF is purchased.

DIs Use More Diversification Elements

Diversification is key to an effective portfolio. DIs take advantage of three diversification types, these being Company Diversification by holding ETFs, Asset Diversification by placing ETFs in its DEP that track different asset-classes and Time Diversification by periodically changing the ETF held if another ETF in the DEP is trending up more strongly in price.

DIs Enhance the Performance of MPT Portfolios Using FIVE Diversification Elements

When used as building blocks in traditional MPT portfolios, DIs both increase their returns and lower their risk by automatically adjusting asset allocations to take advantage of changing market conditions. We call DI enhanced portfolios “Dynamic Portfolios” or “DPorts” for short. DPorts use FIVE diversification elements. They are the three discussed just above plus: Management Method Diversification - using both MPT buy-and-hold methods and DI buy-and-sell methods and Trade Trigger Diversification - MPT trades are made based on subjective human judgments, DI trades are made based on objective observations of market data.

DIs Uncover Massive Value Lying Dormant in Current Product Lines

By “productizing” and thus “monetizing” combinations of existing ETFs, DIs significantly increase the size, scope and value of current ETF product lines without the need to create a single new ETF. This is a huge benefit that will enable organizations that take advantage of it to hold a significant competitive advantage in the crowded ETF marketplace.

There Are More Unique DI Features

You can see that because DIs are created using a completely different approach to investment design, they enable the creation of superior investing solutions that simply are not possible today. The above list shows just a few of the unique features of Dynamic Investments. Other, equally powerful features, are discussed in the NAOI Research Report.