Investing today is complex and full of risky subjective human judgments. This is the result of virtually all portfolios today being designed based on Modern Portfolio Theory (MPT), a methodology that requires portfolios to match a “guesstimate” of each investor’s risk profile. Then investors are told to just hold the portfolio for the long-term with no regard to changing economic conditions, leaving them dangerously vulnerable to market corrections and crashes.

Needed is a “default” portfolio that works for all investors regardless of their risk profile. And this is exactly what the NAOI has created in the form of the “NAOI Universal Portfolio”; the NUP.

The NAOI Universal Portfolio Configuration

The NUP is discussed in Section 8 of the White Paper and illustrated in the diagram below. It holds both a DIT, buy and sell segment and an MPT, buy and hold segment. Its goal is to maximize returns while minimizing risk in all economic conditions - a goal that works for all investors regardless of their risk profile so no customization for each investor is required.

The DIT-based segment makes the NUP market-sensitive, capable of automatically changing the ETFs it holds in order to take advantage of market price uptrends while avoiding or quickly selling areas of the market trending down. As a result, the ultra-simply NUP produces returns higher than virtually any MPT-based portfolio, in both bull and bear markets, with lower risk and no active management required.

A Market-Biased Portfolio

This is what we call a “market biased” portfolio configuration. When Stocks are trending up it will have an 80% allocation to Stocks and a 20% allocation to Bonds - e.g. Stock-biased. When Stocks are trending down the allocation will be 70% Bonds and 30% Stocks - e.g. Bond Biased. Of course designers can change the allocations to each Segment and to the ETFs within each Segment. But the NAOI recommends the above configuration. The NAOI offers classes in Dynamic Portfolio Design as discussed in the Addendum to the White-Paper.

The NUP is the same for all investors and its management can easily be automated. As a result it is the market’s first portfolio “consumer product” that can be sold off-the-shelf by a variety of vendors directly to the investing public. It is the portfolio that the NAOI recommends to all beginning investors as well as for use as a “default” investment for all retirement accounts.

Performance of the NAOI Universal Portfolio: 2008-2021

Below is the performance of the NUP from 2008 to 2020; a period that contained both a significant market crash and an unprecedented bull market. Remember this portfolio automatically signals trades based on a periodic sampling of market trends; no human subjective judgments are used. Investors simply bought and held this portfolio while simply responding to the trades signaled. You can see that the NAOI Universal Portfolio produced returns from 2008-2021 that are unmatched by virtually any actively managed MPT portfolio in existence, and with lower risk!

Note that this portfolio simply will NOT allow investors to lose a substantial amount of money, even during the market crash of 2008-2009, making it the perfect “starter” investment for new, apprehensive investors as well as the perfect “default” investment for 401(k) and other retirement accounts.

The Dawn of the Productization of Investing

The NAOI Universal Portfolio represents the beginning of the “productization of investing”, a topic discussed in Section 8 of the White Paper. This is the “Holy Grail” of the financial world. Experts have been seeking it for decades. They haven’t found it. The NAOI has and now, so have you.