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In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures
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To our readers
Everything in the newsletter pertains to strategies available on our Strategic Solutions platforms at Trust Company of America and Jefferson National Monument Advisor VA. The same strategies are implemented on many other products: mutual funds, variable annuity, variable life and retirement platforms. Therefore, we expect the strategic discussion may be of interest to you. Note, however, that since these products have their own subaccount and fund universes and different internal expenses, the results and trading of the same strategy on other platforms may differ substantially from those described herein.



Managed Retirement Plan Participants:

Most of you are managed using Lifetime Evolution and our sub-advised funds, so those topics will be most applicable to your account. But, more and more of you are in plans using Next Generation and Market Leaders. If so, those newsletter sections may interest you.


 
  April 14, 2014        
  In my opinion
by Jerry Wagner
Running backwards to catch up

Did you ever try to run backwards? I find walking backwards difficult enough. Running in reverse can send you tumbling.

Yet that’s the exercise that various hot sectors of the US stock market engaged in last week. After soaring during the first part of the week, even the broad indexes fell dramatically on Thursday and continued falling on Friday. So far today, we’ve had a nice rally, but is it just a so-called dead cat bounce?

2013 was a great year for stocks. Just check out your twelve-month returns on your statements that are going out this week. While returns in the calendar year were excellent, breakeven to moderate gains or losses were the result for 2014’s first quarter.

As we have been discussing since December, stocks got a bit ahead of themselves with better than 30% returns in 2013. We predicted a retrenchment, accompanied by greater volatility. Of course this has come to pass. Look at the daily price changes so far in April, for example, and count the number of times each index registered a gain or loss of more than 1%:


Source: Flexible Plan Investments

That’s volatility!

As of the end of last week, the average S&P 500 stock was down more than 10% since its recent highpoint, while the broader-based S&P 1500 stock (which includes mid caps and small caps) was down over 14%. Even poorer are the sector indexes, where losses are approaching the 20% bear market mark.


Source: Bespoke Investment Group

So far, the worst of the lot have been biotech and Internet/social network stocks. Their charts look positively horrid:


Source: Bespoke Investment Group

What’s this got to do with running backwards, you might ask?

I’ve pointed out many times in the past that the value of stock prices or index levels are a function of two numbers: the earnings per share and the earnings multiple. Both fluctuate; the former on the basis of the companies’ profitability and the second based on the market environment or psychology.

Earnings have been trending up nicely since the market bottomed five years ago. The growth has been remarkable, and on the S&P 500, for example, the average earnings per share are the highest ever!

The earnings multiple has been trending higher as well. For the S&P 500 it now averages better than 17 times. But there’s the rub – the average multiplier is about 14.

While the multiplier has been much higher at times in our history, when everything has been averaged out, it has usually been lower. If it moves lower at a faster rate than earnings rise, the indexes or the stock falls.
Most of the losses so far have been in the stocks with the highest multiple (P/E ratio):


Source: Bespoke Investment Group

Note, the average P/E ratio for the Russell 1000 stocks is just 2.2!

Currently on Wall Street there is a bit of a quandary over whether the earnings portion will keep rising this quarter (earnings reporting started last week). Because of the severe weather over much of the United States this winter, it is feared that earnings may not have continued their upward progression and may have actually paused or reversed their rise.

If that happens, both earnings and multiples may run in reverse and the market will continue to tumble.

Reading the tea leaves of the early reports suggest that this will not happen. Both the Alcoa and Citi Group earnings beat expectations. And today’s Retail Sales Report was explosive good news. Sales in March grew at their fastest rate in a year and a half. In fact, pretty much across the board, economic reports have been signaling that the winter may not have been as damaging as once thought. Last week, eight out of eleven reports were better than expected!

So my guess is that the earnings portion of the valuation equation will hold its own. It might not gain as much as past quarters, but it will more than meet expectations. It will keep running in the right direction.

Of course, that still leaves the multiples portion. I’m not so confident here. Psychology has been badly shaken by the volatility demonstrated in the charts above. As the chart shows, bearish sentiment continues to increase. Unfortunately, it is not yet at the levels where a rally usually commences (over 50).


Source: Bespoke Investment Group

A reduction in the P/E ratio to reflect this investor caution could easily occur. And a continuation of the volatility mostly to the downside could continue. We could be running backwards on this part of the equation for a while longer.

Still, most of the losses have been confined to the sectors mentioned above, the tech issues and the smaller cap names. The S&P, for example, is down only 3.97% (as of Friday’s close) from its high point on April 2. And so far our indicators, while becoming ever more defensive, have not given up on this five-year-old bull market. Like me, they believe that stocks will move still higher, they just might have to run backwards for a spell to catch up after last year’s remarkable sprint.



All the best,

Jerry




     
  About Jerry Wagner
CEO for Flexible Plan Investments, Ltd. (FPI), Jerry Wagner is a leader in the active investment management industry. Since 1981, Flexible Plan Investments has focused on preserving and growing capital through a robust active investment approach combined with risk management. Headquartered in Michigan, FPI offers a wide array of strategies and services that help financial advisors build their business and retain clients. More importantly, FPI helps thousands of clients achieve their long-term financial goals.
 
     

Disclosures


In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures
 
  April 14, 2014      
Top of page
  What's happening at Flexible Plan

Good Friday

Our office will be closed on Friday, April 18th in observance of the Good Friday holiday and market closure.


First Quarter Statements

1st quarter statements are scheduled to be delivered this week. For those clients who have elected to receive electronic delivery of our correspondence to you, be sure to go to ontargetinvesting.com to verify that we have your current email address in our system. If you haven’t already done so, you can contact Client Services at 800-347-3539 x1 to set up e-delivery.


Next Generation Asset Allocation

We continue the process of closing our Next Generation Asset Allocation strategy for accounts at Strategic Solutions and within Jefferson National Monument Advisor, Nationwide MarketFLEX, Prudential and Security Benefit Life VA policies, with letters being sent to clients and their Financial Advisors throughout the month. In the meantime, all Next Generation Asset Allocation (NGAA) accounts will continue to be managed in accord with the NGAA rules.


In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  April 14, 2014      
Top of page
  Last week in the market

NASDAQ settles below 4,000

A 3.10% plunge across five trading days took the Nasdaq Composite to a Friday close of 3,999.73. The Dow and S&P 500 also went red on the week – the blue chips retreated 2.35% to 16,026.75 and the S&P fell 2.64% to 1,815.69. 4,5

% Change Y-T-D 1-Yr Chg 5-Yr Avg 10-Yr Avg
DJIA
-3.32
+7.81
+19.65
+5.24
NASDAQ
-4.23
+21.20
+28.41
+9.36
S&P 500
-1.77
+13.95
+22.39
+5.85
Real Yield 4/11 Rate 1-Yr Ago 5-Yrs Ago 10-Yrs Ago
10Yr TIPS Yd
0.50%
-0.65%
1.62%
1.81%

  March
DJIA
0.83%
NASDAQ
-2.53%
S&P 500
0.84%

Sources: USATODAY.com, bigcharts.com, treasury.gov - 4/11/14 5,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.



Household sentiment reaches 9-month peak

The University of Michigan’s index of consumer sentiment rose 2.6 points in its preliminary April reading, bouncing back from a 4-month low of 80.0 at the end of March to a high unseen since last July. From 2003-07, the index averaged a reading of 89.0; during the 2007-09 recession, its average mark was just 64.2. 1



Producer prices rose 0.5% in March

You have to go back to last June (when wholesale inflation spiked 0.8%) to find such a sizable monthly advance in the Producer Price Index. The PPI had retreated 0.1% in February. A 1.1% monthly increase in wholesale food costs was a big factor. Annualized wholesale inflation rose to 1.4% in March, up from 0.9% for February. 1,2



Oil, gas, gold log notable gains

NYMEX crude was worth $103.74 per barrel at Friday’s close thanks to a 2.6% advance during the week. On April 10, AAA’s weekly survey found a gallon of unleaded averaging $3.62 nationally, which was an 8-month peak. An ounce of gold was worth $1,319.00 as the COMEX trading week ended, with futures up 1.2% in five days; an ounce of palladium was worth $806.80, a high unseen since 2011. 1,3



Citations

1 - bloomberg.com/news/2014-04-11/michigan-u-s-sentiment-index-increased-to-82-6-in-april-from-80.html [4/11/14]
2 - investing.com/economic-calendar/ [4/11/14]
3 - proactiveinvestors.com/companies/news/53395/gold-up-12-for-the-week-oil-picks-up-26-palladium-hits-2011-high-53395.html [4/11/14]
4 - google.com/finance?q=INDEXSP%3A.INX&ei=11VIU_C8JaXLiQKgzgE [4/11/14]
5 - usatoday.com/money/markets/overview/ [4/11/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F11%2F13&x=0&y=0 [4/11/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F11%2F13&x=0&y=0 [4/11/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F11%2F13&x=0&y=0 [4/11/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F9%2F09&x=0&y=0 [4/11/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F9%2F09&x=0&y=0 [4/11/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F9%2F09&x=0&y=0 [4/11/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F12%2F04&x=0&y=0 [4/11/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F12%2F04&x=0&y=0 [4/11/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F12%2F04&x=0&y=0 [4/11/14]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [4/11/14]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/11/14]


In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  April 14, 2014      
Top of page
  Gold

That GOLD is mine

As pointed out in a previous column, the price of Gold   has twice bounced off of the $1200.00 level, something that has been attributed to that being the current cost of production for the Gold Mining companies.


The S&P GSCI® Gold Index, a sub-index of the S&P GSCI, provides investors with a reliable and publicly available benchmark tracking the COMEX gold future.

As we wait to see if this price level holds during this period of consolidation and a new uptrend in Gold begins, it is instructive to take a step back and look at  how Gold Mining costs have almost doubled since 2008.



  Hedged Gold Bullion
Top of page

Hedged Gold Bullion gained 1.20% last week. The 65% allocation in The Gold Bullion Strategy Fund (QGLDX) was responsible for two-thirds of the weekly gains for the total portfolio. A 25% hedging position with the ProFunds-Short Precious Metal Fund (SPPSX) was only on last Thursday (4/10), and it added 0.46% to the portfolio’s weekly gain.


  The Gold Bullion Strategy Fund
Top of page

Over last week, the Gold spot price rose 1.14% as the US Dollar weakened. The Gold Bullion Strategy Fund (QGLDX) gained 1.22% for the week. The difference was partially due to QGLDX’s early close at 1:30PM (rather than 4:00PM). The prices of short-duration fixed income ETF holdings were slightly higher on average over last week, while the COMEX Gold futures contracts added 1.19%.

 


In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  April 14, 2014      
Top of page
  Quantified Funds

US equity markets were down last week. The NASDAQ Composite tumbled 3.10%, the S&P 500 lost 2.65%, and the Dow Jones Industrial Average recorded a weekly loss of 2.35%. Nine of the ten S&P industrial sectors were down for the week. The move downward was led by Health Care (-4.03%), Financials (-3.99%), and Consumer Discretionary (-3.69%), while Utilities, the best performing sector, rose 0.53%. Except for the Quantified Managed Bond Fund (QBDSX), which was up 0.30%, the Quantified Funds were down, though not as much as the broad equity indices. The Quantified Market Leaders Fund (QMLFX, -2.47%) had the largest loss, compared to those of the Quantified Alternative Investment (QALTX, -2.26%) and Quantified All-Cap Funds (QACFX, -1.70%).

The Quantified All-Cap Equity Fund (QACFX) made a few changes last week, shifting its weights in four leading stock baskets, which remained at over 40% of the portfolio’s composition: “All-Cap Takeover” (18.0%), “CMPS- Double 10 Dividend & Growth” (13.0%), “CMPS- Price Momentum” (10.0%), and “All-Cap- Dividend Yield” (8.6%). Among domestic sector distributions, Information Technology and Consumer Discretionary continued to lead with portfolio allocations of 15% and 14%, respectively. The largest stock holdings in the All-Cap portfolio were in the common stock of Sanderson Farms Inc. (SAFM, 2.9%) and the common stock of Benchmark Electronics Inc. (BHE, 2.3%).

The cash level within the All-Cap Fund remained at 12.7% last week. The Fund’s daily pattern trading of S&P 500 futures began the week neutral, changed to 3% long on Monday’s close, remaining there to begin this week. Our TVA-based futures hedge position began the week neutral, changing to 8% short on Tuesday’s close, 15% short on Wednesday’s close, and 20% short on Friday’s close to begin this week.

The Market Environment Indicator (MEI) remained bullish throughout the week, directing a continued 100% equity exposure in the Quantified Market Leaders Fund (QMLFX). Total sector ETF weightings for the Fund were maintained at 30%, distributed in Energy (6%), Utilities (6%), Basic Materials (4%), Consumer Services (4%), Financial Services (4%), Telecommunications (4%), and Health Care (2%).

Most equity asset class allocations in the Quantified Market Leaders Fund changed last week: Developed Countries was introduced with a weight of 6%, Emerging Markets increased from 6% to 12%, the 6% weight in Large-Cap Growth was eliminated, Large-Cap Value increased from 8% to 10%, Mid-Cap Growth decreased from 12% to 6%, Mid-Cap Value eliminated its 2% weight, Small-Cap Growth remained at 18%, and Small-Cap Value remained at 18%. The individual ETF positions with the leading portfolio weightings were the Rydex S&P 500 Pure Value ETF (RPV, 3.3%), the iShares Russell 2000 Value Index ETF (IWN, 3.2%), and the iShares MSCI Turkey Index ETF (TUR, 3.0%).

Within the Quantified Alternative Investment Fund (QALTX), the Long/Short Market Neutral Alternative sub-portfolio made a few, small changes: allocations to the Catalyst Strategic Insider Fund (STVAX, 3.30%) and the Cambria Global Tactical ETF (GTAA, 2.70%) increased, while the allocations to the Highland Long/Short Healthcare Fund (HHCAX, 0.67%) and the ProFunds Short Precious Metals Fund (SPPIX, 1.30%) decreased.

Among the largest ETF positions, there were a few changes: allocations to the Rydex S&P Equal Weight Healthcare ETF (RYH, 1.4%) and the Claymore S&P Global Water ETF (CGW, 2.2%) both increased, while allocation to the PowerShares Global Water ETF (PIO, 1.4%) decreased.

The cash level within the Fund rose to 34.6% last week. The daily pattern trading of S&P 500 Index futures with 10% fund capital allocation began the week neutral, changed to 3% long on Monday’s close, and remained there to begin this week. The 7.5% capital allocation of the volatility-based systematic trading of NASDAQ 100 Index futures was 10.5% long Monday, changing to 7.5% long for Tuesday through Thursday, 6.0% long for Friday, and 4.5% long to begin this week.

The Quantified Managed Bond Fund’s (QBDSX) two leading broad-bond index ETF holdings, the Vanguard Total Bond Market ETF (BND, +0.61%) and the PIMCO Total Return ETF (BOND, +0.58%), were both up for the week.

The 10-year US Treasury yield decreased to 2.63% for the week. The Fund increased weightings in the Vanguard Total Bond Market ETF (BND) from 10.0% to 10.8% and in the iShares Barclay’s 7-10 Year Treasury Bond ETF (IEF) from 6.6% to 9.2%, while decreasing allocations in the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) from 11.4% to 9.7% and in the iShares S&P National Municipal Bond ETF (MUB) from 6.6% to 6.4%.

The 5% active portfolio exposure to 30-Year US Treasury Bond futures in the Fund started the week short, changed to long at Wednesday’s (4/9) close, switched back to short at Thursday’s (4/10) close, and finally moved to neutral at Friday’s (4/11) close to start this week. The position gained around 0.14% over last week.


Fund (Inception) Symbol Qtr Ending 3/31/14 1 Year Ending 3/31/14 Since Inception Ending (4/11/14) Annual Expense Ratio
The Gold Bullion Strategy Fund (7/5/13) QGLDX 6.44% N/A 6.04% 1.55%
Quantified Managed Bond Fund (8/9/13) QBDSX 2.02% N/A 2.16% 1.68%
Quantified All Cap Equity Fund (8/9/13) QACFX (1.37%) N/A 0.48% 1.51%
Quantified Market Leaders Fund (8/9/13) QMLFX 0.86% N/A 3.92% 1.71%
Quantified Alternative Investment Fund (8/9/13) QALTX 0.75% N/A 6.18% 2.20%

The performance data quoted represents past performance; past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate and an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted.  For current performance, please call 1-855-647-8268.

Risks associated with the Quantified Funds include active frequent trading risk, aggressive investment techniques, small and mid-cap companies risk, counter party risk, depository receipt risk, derivatives risk, equity securities risk, foreign securities risk, holding cash risk, limited history of operations risk, lower quality debt securities risk, non-diversification risk, investing in other investment companies (including ETFs) risk, shorting risk, asset backed securities risk, commodity risk, credit risk, interest risk, prepayment risk, and mortgage backed securities risk.  For detailed information relating to these risks, please see prospectus.

The principal risks of investing in The Gold Bullion Strategy Fund are Risks of the Sub-advisor’s Investment Strategy, Risks of Aggressive Investment Techniques, High Portfolio Turnover, Risk of Investing in Derivatives, Risks of Investing in ETFs, Risks of Investing in Other Investment Companies, Leverage Risk, Taxation Risk, Concentration Risk, Gold Risk, Wholly-owned Corporation Risk, Risk of Non-Diversification and interest rate risk. “Gold Risk” includes volatility, price fluctuations over short periods, risks associated with global monetary, economic, social and political conditions and developments, currency devaluation and revaluation and restrictions, trading and transactional restrictions.

An investor should consider the investment objectives, risks, charges and expenses of each Quantified Fund and The Gold Bullion Strategy Fund before investing. This and other information can be found in the Funds’ prospectus, which can be obtained by calling 1-855-647-8268. The prospectus should be read carefully prior to investing in The Quantified Funds or The Gold Bullion Strategy Fund.

There is no guarantee that any of the Quantified Funds or The Gold Bullion Strategy Fund will achieve their investment objectives.


Disclosures

     
  For more information on the Quantified Funds, sub-advised by Flexible Plan Investments, Ltd., please review the prospectus and fund performance.

Current or historical holdings of the funds
 
     

In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  April 14, 2014      
Top of page
  Diversified Bonds

Diversified Bonds gained 0.30% last week, as four of its six portfolio components posted gains. Systematic Long/Short Bond Trading gained the most among the portfolio components.

Strategy Weekly returns YTD-March returns Allocation
Diversified Bond Portfolio 0.30% 0.51%  
Global Maturities -0.01% 0.91% 31%
Managed Income 0.06% 1.66% 21%
Managed Income - 100% SAF 0.25% -7.67% 17%
Managed Income Aggressive 0.99% 10.54% 5%
Strategic High Yield Bond -0.15% 2.07% 13%
Systematic Long/Short Bond Trading 1.74% -8.81% 13%



  Strategic High Yield Bond
Top of page

Strategic High Yield Bond continued to hold its 100% invested position in a high-yield bond fund, falling 0.15% for the week.

Disclosures
     
  Diversified Bonds implements strategic diversification within the broad fixed income asset classes, ranging from domestic to global debt, and from government to high yield bonds. It is a blend of six actively managed fixed income strategies maintained and monitored by Flexible Plan Investments, each of which follows a rules-based discipline designed to best manage interest rate and other fixed income asset class market conditions utilizing no load index mutual funds. The Diversified Bonds portfolio seeks out allocations in the leading fixed income strategies that, when combined, seek to yield the highest return with a low level of targeted drawdown typical of a conservative portfolio. More information  
     


In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  April 14, 2014      
Top of page
  Diversified Tactical Equity

Diversified Tactical Equity fell 1.59% last week, as only Contrarian S&P Trading notched a gain. It was a tough week for equities, as half of Diversified Tactical Equity’s component strategies fell more than 2%.

Strategy Weekly returns March returns Allocation
Diversified Tactical Equity -1.59% -1.52%  
Classic -2.85% 0.13% 7%
Contrarian S&P Trading 0.56% -0.52% 11%
Gold Equities Trading -0.05% -1.24% 12%
Market Leaders Dynamic Aggressive -3.58% 0.58% 10%
Political Seasonality Index -1.50% -0.97% 6%
S&P Tactical Patterns -0.30% -3.73% 12%
Self-adjusting Trend Following -3.60% -5.11% 11%
Systematic Advantage -2.33% 0.36% 10%
Third Day Tactical Blend -0.59% -1.47% 12%
Volatility Adjusted NASDAQ -2.84% -2.68% 11%
 
  Classic Update
Top of page

Classic fell 2.85% last week, as all four of its positions declined. All Classic, Growth and DAAP accounts continued to hold their equity positions, as our time-tested econometric model maintained its optimistic view of US equity prices.

  Political and Seasonal Tendencies
Top of page

Political Seasonality Index moved from money market to its 50% 2X Dow Jones Industrial Average-based position at Tuesday’s close, falling 1.50% on the week.

PSI Chart

 
  Self-adjusting Trend Following
Top of page

Another very poor showing for equities this week saw the NASDAQ lead the other US indices down. A mid-week rally, which saw the NASDAQ 100 recover to 3600, failed Thursday and Friday, driving stocks down more than 150 points and closing just above the lows set earlier in the year during the February swoon. At this prior point, the market rallied to new multi-year highs, but the recent breakdown looks (and feels) more severe. As seen in the chart below, it was just in the last two days that the index dropped into negative territory for the year.

Listening and reading the commentary on the declines this week makes it seem like 2000 all over again, as high-flying NASDAQ companies are responsible for the market’s woes. There is an over-generalization at work, though. While most biotech companies are listed on the NASDAQ, most of them are not in the NASDAQ 100 – they don’t have enough market capitalization. Internet and social media stocks are also to blame, but with the exception of Twitter – which doesn’t trade on the NASDAQ 100 – these stocks are profitable, some at low P/E multiples. The only similarity to be made about 2000 is that markets reached their peak in March and began bottoming in April before the bear market started in September.

And that leads to STF and its position. Currently, if the chart was set for one year, an investor would see that the market trend is still clearly up. It has begun to trade sideways since January 2014, which explains much of STF’s performance YTD, but the strategy’s insistence on staying long becomes clearer with the big picture. In bull markets, investors buy those that have missed the rally. That occurred in 2000, and again in 2008. If this is the beginning of a bear market, just as in the past, STF will not go short or even to cash for some time, allowing for this behavioral phenomena to help recover some of the losses experienced. TVA, Flexible Plan’s extreme volatility dampener, may kick in this week if the market continues to slide.




 

 
  Third Day Tactical
Top of page

Third Day Tactical Blend fell 0.59% and Third Day Tactical Blend Balanced fell 0.46% last week. The model had us in a 1X position on Tuesday, which produced a gain, then another on Friday, which produced a larger loss. The model held the 1X position over the weekend.


Weekly returns YTD-March returns
Third Day Tactical Blend Balanced -0.46% -1.26%
Third Day Tactical Blend -0.59% -1.47%


Disclosures
     
  Diversified Tactical Equity implements strategic diversification within a selection of actively managed tactical strategies maintained and monitored by Flexible Plan Investments. Each of the strategies follows a rules-based discipline designed to best manage equity index and other asset class risk under various market conditions, utilizing no load index mutual funds. The Diversified Tactical Equity portfolio seeks to allocate within the leading tactical strategies that, when combined, seek to maximize return while reducing drawdown below a target level suitable for a growth-oriented investor. Each quarter the weightings among the eight component strategies will be reviewed and may be adjusted in accordance with Flexible Plan's proprietary technology. More information  
     


In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  April 14, 2014      
Top of page
  Faith Focused Investing

Faith Focused Investing portfolios ended down for the week. The majority of the positions lost value last week. There were changes to the portfolios last week and all portfolios were fully invested according to their risk profile.

For last week, the Faith Focused Investing portfolios returned:

Faith Focused Investing portfolios
Weekly returns YTD-March returns
Faith Focused Investing Conservative -0.93% 0.27%
Faith Focused Investing Moderate -1.56% 0.07%
Faith Focused Investing Balanced -1.85% 0.01%
Faith Focused Investing Growth -2.15% -0.12%
Faith Focused Investing Aggressive -2.72% -0.30%

Disclosures
     
  Faith Focused Investing is based on the same investment management techniques that have, since 1998, approximated the S&P 500 Index in total return with less risk in our For A Better World strategy. Flexible Plan ranks the performance of the available funds on an ongoing basis, regularly screening and rotating the funds in each client's portfolio to keep them invested in the top ranked, qualifying funds. For more information go to: http://www.faithfocusedinvesting.com  
     

In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  April 14, 2014      
Top of page
  Fusion

This past week portfolios performed right in line with their equity allocations. The performance ranged from -0.25% to -3.69% from the most conservative to the most aggressive portfolio allocations. The degree to which a portfolio declined was largely due to allocation to net-long equity positions at the beginning of the week. No adjustments were made to portfolio allocations among strategies during the week. However, the individual strategies may have made position changes internally during the week.

A DISCUSSION ABOUT FUSION AND VOLATILITY

Fusion analyzes a number of asset class and strategy criteria when crafting each portfolio. Two of those criteria are volatility and correlation. These two criteria are closely linked. Under normal market conditions, volatility is relatively low and stable. This allows for correlation among asset classes and strategies to be dispersed fairly widely. Such a stable low volatility market environment contributes to the Fusion engine, not making many large changes among asset class or strategy allocations from month to month when crafting each of the portfolios.

However, when volatility rises significantly, correlation among asset classes and strategies move closer together. When this increase in volatility happens in a short period of time, it contributes greatly to the Fusion engine, making fairly significant changes among the asset class and strategy selection and allocations from month to month when crafting each of the portfolios. A similar fairly significant change in selections and allocations will occur when volatility and correlations are high and then volatility declines from a high level in a short period of time.


Fusion portfolios Weekly returns YTD-March returns
Fusion Conservative -0.48% -2.50%
Fusion Moderate -1.24% -3.82%
Fusion Enhanced Income -1.55% -4.55%
Fusion Balanced -2.11% -5.41%
Fusion Growth -3.09% -6.88%
Fusion Aggressive -3.69% -7.55%


  FUSION underlying allocations
   
FUSION Conservative Allocation
1.2X Government Bond 17%
2X S&P 500 10%
2X Emerging Markets 2%
Strategic High Yield Bond 2%
Classic 26%
Managed Income Aggressive 10%
Managed Income - 100% SAF 7%
Inverse NASDAQ 100 1%
Inverse Russell 2000 5%
Inverse Precious Metals 3%
Money Market 6%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION Moderate Allocation
1.2X Government Bond 15%
2X S&P 500 20%
2X Emerging Markets 5%
Classic 27%
Managed Income Aggressive 12%
2X NASDAQ 100 4%
Inverse Russell 2000 4%
Inverse Precious Metals 3%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION Enhanced Income Allocation
1.2X Government Bond 14%
2X S&P 500 23%
2X Emerging Markets 6%
Classic 25%
Managed Income Aggressive 10%
2X NASDAQ 100 7%
Inverse Russell 2000 4%
Inverse Precious Metals 2%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION Balanced Allocation
1.2X Government Bond 10%
2X Russell 2000 1%
2X S&P 500 29%
2X Emerging Markets 7%
Classic 20%
Managed Income Aggressive 8%
2X NASDAQ 100 10%
Inverse Russell 2000 3%
Inverse Precious Metals 2%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION Growth Allocation
1.2X Government Bond 5%
2X Russell 2000 4%
2X S&P 500 36%
2X Emerging Markets 8%
Best Tech 1%
Classic 14%
Managed Income Aggressive 4%
2X NASDAQ 100 17%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION Aggressive Allocation
2X Russell 2000 5%
2X S&P 500 36%
2X Emerging Markets 9%
Best Tech 5%
Classic 6%
2X International Developed 8%
2X NASDAQ 100 21%
Hedged Gold Bullion 5%
TVA Gold 5%


  FUSION PRIME underlying allocations
   
FUSION PRIME 5 Allocation
1.2X Government Bond 14%
2X Dollar 2%
2X S&P 500 5%
Strategic High Yield Bond 3%
Classic 20%
Managed Income Aggressive 6%
Managed Income - 100% SAF 14%
Third Day Tactical Blend Balanced 2%
Inverse NASDAQ 100 3%
Inverse Russell 2000 5%
Inverse Government Bond 2%
Inverse S&P 500 2%
Inverse Precious Metals 3%
Money Market 11%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION PRIME 6 Allocation
1.2X Government Bond 16%
2X S&P 500 7%
Strategic High Yield Bond 3%
Classic 23%
Managed Income Aggressive 8%
Managed Income - 100% SAF 12%
Third Day Tactical Blend Balanced 1%
Inverse NASDAQ 100 1%
Inverse Russell 2000 6%
Inverse Precious Metals 4%
Money Market 10%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION PRIME 7 Allocation
1.2X Government Bond 17%
2X S&P 500 9%
2X Emerging Markets 2%
Strategic High Yield Bond 2%
Classic 24%
Managed Income Aggressive 9%
Managed Income - 100% SAF 9%
Inverse NASDAQ 100 1%
Inverse Russell 2000 5%
Inverse Precious Metals 4%
Money Market 8%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION PRIME 8 Allocation
1.2X Government Bond 17%
2X S&P 500 10%
2X Emerging Markets 2%
Strategic High Yield Bond 2%
Classic 26%
Managed Income Aggressive 10%
Managed Income - 100% SAF 7%
Inverse NASDAQ 100 1%
Inverse Russell 2000 5%
Inverse Precious Metals 3%
Money Market 6%
Hedged Gold Bullion 5%
TVA Gold 5%
FUSION PRIME 9 Allocation
1.2X Government Bond 18%
2X S&P 500 11%
2X Emerging Markets 3%
Classic 28%
Managed Income Aggressive 12%
Managed Income - 100% SAF 5%
Inverse Russell 2000 5%
Inverse Precious Metals 3%
Money Market 4%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION PRIME 10 Allocation
1.2X Government Bond 18%
2X S&P 500 13%
2X Emerging Markets 3%
Classic 28%
Managed Income Aggressive 13%
Managed Income - 100% SAF 3%
2X NASDAQ 100 2%
Inverse Russell 2000 5%
Inverse Precious Metals 3%
Money Market 3%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION PRIME 11 Allocation
1.2X Government Bond 18%
2X S&P 500 14%
2X Emerging Markets 3%
Classic 30%
Managed Income Aggressive 14%
2X NASDAQ 100 2%
Inverse Russell 2000 5%
Inverse Precious Metals 3%
Money Market 1%
Hedged Gold Bullion 5%
TVA Gold 5%
FUSION PRIME 12 Allocation
1.2X Government Bond 17%
2X S&P 500 15%
2X Emerging Markets 5%
Classic 29%
Managed Income Aggressive 14%
2X NASDAQ 100 3%
Inverse Russell 2000 5%
Inverse Precious Metals 3%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION PRIME 13 Allocation
1.2X Government Bond 16%
2X S&P 500 17%
2X Emerging Markets 5%
Classic 28%
Managed Income Aggressive 14%
2X NASDAQ 100 3%
Inverse Russell 2000 4%
Inverse Precious Metals 3%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION PRIME 14 Allocation
1.2X Government Bond 15%
2X S&P 500 20%
2X Emerging Markets 5%
Classic 27%
Managed Income Aggressive 12%
2X NASDAQ 100 4%
Inverse Russell 2000 4%
Inverse Precious Metals 3%
Hedged Gold Bullion 5%
TVA Gold 5%
FUSION PRIME 15 Allocation
1.2X Government Bond 14%
2X S&P 500 21%
2X Emerging Markets 6%
Classic 26%
Managed Income Aggressive 11%
2X NASDAQ 100 6%
Inverse Russell 2000 4%
Inverse Precious Metals 2%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION PRIME 16 Allocation
1.2X Government Bond 14%
2X S&P 500 23%
2X Emerging Markets 6%
Classic 25%
Managed Income Aggressive 10%
2X NASDAQ 100 7%
Inverse Russell 2000 4%
Inverse Precious Metals 2%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION PRIME 18 Allocation
1.2X Government Bond 12%
2X S&P 500 27%
2X Emerging Markets 6%
Classic 23%
Managed Income Aggressive 9%
2X NASDAQ 100 8%
Inverse Russell 2000 3%
Inverse Precious Metals 2%
Hedged Gold Bullion 5%
TVA Gold 5%
FUSION PRIME 20 Allocation
1.2X Government Bond 10%
2X Russell 2000 1%
2X S&P 500 29%
2X Emerging Markets 7%
Classic 20%
Managed Income Aggressive 8%
2X NASDAQ 100 10%
Inverse Russell 2000 3%
Inverse Precious Metals 2%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION PRIME 22 Allocation
1.2X Government Bond 8%
2X Russell 2000 3%
2X S&P 500 33%
2X Emerging Markets 7%
Classic 18%
Managed Income Aggressive 6%
2X NASDAQ 100 12%
Inverse Russell 2000 2%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION PRIME 24 Allocation
1.2X Government Bond 7%
2X Russell 2000 4%
2X S&P 500 35%
2X Emerging Markets 8%
Classic 16%
Managed Income Aggressive 5%
2X NASDAQ 100 14%
Inverse Russell 2000 2%
Hedged Gold Bullion 5%
TVA Gold 5%
FUSION PRIME 28 Allocation
1.2X Government Bond 2%
2X Russell 2000 5%
2X S&P 500 36%
2X Emerging Markets 9%
Best Tech 4%
Classic 12%
Managed Income Aggressive 3%
2X NASDAQ 100 19%
Hedged Gold Bullion 5%
TVA Gold 5%
FUSION PRIME 32 Allocation
2X Russell 2000 5%
2X S&P 500 36%
2X Emerging Markets 9%
Best Tech 5%
Classic 6%
2X International Developed 8%
2X NASDAQ 100 21%
Hedged Gold Bullion 5%
TVA Gold 5%


Disclosures

     
  Fusion is our flagship core portfolio management approach which draws on the over 33 years of experience Flexible Plan has in researching and utilizing hundreds of different investment strategies and innovative risk management techniques. Fusion employs strategic diversification, a revolutionary way of measuring and managing risk, and incorporates an algorithm to evaluate and manage asset category correlation. All of these tools are used together to enhance performance and manage risk in a dynamic fashion so that portfolios can adapt to changing market conditions. For more information click here: http://www.flexibleplan.com/public/fusion-portfolio.aspx  
     

 


In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  April 14, 2014      
Top of page
  Lifetime Evolution

The Lifetime Evolution portfolios ended the week down. All but few bond positions and The Gold Bullion Strategy Fund experienced losses during the week. There were changes to the portfolios and all portfolios were fully invested according to their risk profile.

Last week, the Lifetime Evolution profiles returned:

Lifetime Evolution profiles
Weekly returns YTD-March returns
Lifetime Evolution Conservative -0.81% -0.15%
Lifetime Evolution Moderate -1.41% -0.74%
Lifetime Evolution Balanced -1.60% -1.00%
Lifetime Evolution Growth -1.82% -1.18%
Lifetime Evolution Aggressive -1.96% -1.42%

Disclosures
     
  Lifetime Evolution, an exclusively price momentum based strategy that can move to a 100% cash position, has 12 suitability-based investor profiles and is available on most of our investment platforms, including Strategic Solutions. More information  
     


In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  April 14, 2014      
Top of page
  Market Leaders

It was a very rough week for the markets: the blue-chip S&P fell 2.7% and the more volatile Russell 2000 declined 3.6%. For the week on a relative basis, value outperformed growth and large caps fared better than small caps. Fortunately, before last week’s meltdown Market Leaders had moved to value and large caps over small caps and growth.

On an absolute basis, it was a down week with all asset classes, leaders, and laggards showing negative returns. The leading asset classes within Market Leaders had losses similar to the overall market and not like the more volatile growth and small-cap stocks.

Market Leaders Strategic & Tactical
Rank
  Asset Class % change (4/4-4/11/14)  
#1   Mid-Cap Value -2.9%  
#2   Large Value -2.6%  
#3   Large Growth -2.8%  
#4   Small Value -3.1%  
         
    S&P 500 Index -2.7%  
    All Country World Index -1.9%  
    Aggregate Bond Index 0.6%  

Weakness in stocks pushed investor interest back to bonds, which managed modest gains for the week.        

SECTORS

Sectors suffered larger losses than the market as many are more growth oriented than value. Banking was the hardest hit, with poor earnings announcements from several of the leading banks. It appears higher mortgage rates have slowed the creation of new mortgages, which is a large revenue base for many banks. Biotechnology, which is no longer among our sector holdings, remains in a downtrend and has had a negative impact on the broader Health Care sector, which continues to be a holding.

Previous Leading Sectors % change (4/4-4/11/14)
Banking -4.0%
Technology -3.6%
Electronics -3.9%
Health Care -4.3%

Source: FastTrack, S&P 500 (sp-cp), Mid-Cap Value (IWS), Small-Cap Value (IWN), Small-Cap Growth (IWO), Large Value (IWD), Russell 2000 (RUT-I), Russell Mid Cap (RUM-I), Russell Large Cap (RUI-I), Aggregate Bond Index (AGG), Developed Countries (EFA), Mid-Cap Growth (IWP), All Country World Index (ACWI), Value Line Arithmetic Average (VLE-I), U.S. Ten Year Treasury Yield (US10-) Biotechnology (RYOAX), Technology (RYTAX), Internet (RYIAX), and Leisure (RYLAX)

Dynamic Weekly returns YTD-March returns
Market Leaders Dynamic Conservative -0.22% 1.36%
Market Leaders Dynamic Moderate -1.09% 1.21%
Market Leaders Dynamic Balanced -1.94% 0.94%
Market Leaders Dynamic Growth -2.77% 0.78%
Market Leaders Dynamic Aggressive -3.58% 0.58%
Strategic Weekly returns YTD-March returns
Market Leaders Strategic Conservative -1.17% -1.32%
Market Leaders Strategic Moderate -1.93% -1.75%
Market Leaders Strategic Balanced -2.61% -1.92%
Market Leaders Strategic Growth -3.00% -1.45%
Market Leaders Strategic Aggressive -3.11% -0.55%
Tactical Weekly returns YTD-March returns
Market Leaders Tactical Conservative -0.03% 1.21%
Market Leaders Tactical Moderate -0.69% 0.89%
Market Leaders Tactical Balanced -1.42% 0.60%
Market Leaders Tactical Growth -2.28% 0.25%
Market Leaders Tactical Aggressive -3.11% -0.05%

Disclosures
     
  Market Leaders invests only in the leading funds of the leading asset classes, based on historical price momentum. It is available in three versions: Strategic (with no market timing), Tactical (which can move up to 50% in cash during market corrections) and Dynamic (which, in addition to cash, can use short sales for defensive purposes.) Strategic and Tactical are available on most platforms, while Dynamic is restricted to platforms that offer Rydex, Direxion or ProFunds. For more information go to: http://www.ontargetinvesting.com/home/marketlead.aspx  
     


In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  April 14, 2014      
Top of page
  Next Generation Asset Allocation

All Next Generation portfolios ended the week in negative territory last week. Over 95% of the holdings were down during the week. Losses in all sectors caused the portfolios to lose value. All strategies were fully invested according to their risk profile.

The Next Generation Asset Allocation portfolios’ returns last week were:

Next Generation Asset Allocation
Weekly returns YTD-March returns
Next Generation Conservative -1.25% -0.89%
Next Generation Moderate -1.79% -1.27%
Next Generation Balanced -2.50% -0.87%
Next Generation Growth -2.66% -0.84%
Next Generation Aggressive -2.87% -1.18%

 

     
  2008 was this strategy's inaugural year. Designed as an alternative to traditional asset allocation and utilizing 21st century techniques, instead of simply those designed 50 years ago, the methodology uses resampled efficiency asset allocation, alternative investments, active management of asset class investments and daily hedging using inverse funds. It is available at Strategic Solutions and most platforms using the Rydex, Direxion or ProFunds inverse funds. More information  
     


In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  April 14, 2014      
Top of page
  Other Custodians

ETF

The Rotational No-Load ETF/SAF, Rotational No-Load ETF, and Market Leaders Strategic ETF portfolios all posted negative returns for the week. For at least four weeks now, higher beta, high growth, momentum-based styles have fared the worst. Furthermore, it is the case, again, that there was a perfect inverse correlation between strategy risk profile and subsequent return for the week. The most aggressive strategies suffered to the tune of -2.5% to -2.7%, while the most conservative strategies faired relatively better, returning -0.57% to -0.92%. The higher risk profile portfolios were hurt by their allocation to small caps, while the more conservative risk profiles benefitted from a larger money market allocation.

ETF Market Leaders portfolios
Weekly returns YTD-March returns
ETF Market Leaders Conservative -1.62% -2.04%
ETF Market Leaders Moderate -2.70% -2.89%
ETF Market Leaders Balanced -3.35% -3.61%
ETF Market Leaders Growth -3.54% -3.08%
ETF Market Leaders Aggressive -3.72% -2.01%

Rotational No-Load ETF portfolios
Weekly returns YTD-March returns
Rotational No-Load ETF Conservative -0.57% -0.86%
Rotational No-Load ETF Moderate -1.10% -1.07%
Rotational No-Load ETF Balanced -1.61% -1.31%
Rotational No-Load ETF Growth -2.15% -1.55%
Rotational No-Load ETF Aggressive -2.66% -1.52%

Rotational No-Load ETF/SAF portfolios
Weekly returns YTD-March returns
Rotational No-Load ETF/SAF Conservative -0.87% -0.62%
Rotational No-Load ETF/SAF Moderate -1.45% -1.17%
Rotational No-Load ETF/SAF Balanced -1.95% -1.16%
Rotational No-Load ETF/SAF Growth -2.26% -0.90%
Rotational No-Load ETF/SAF Aggressive -2.58% -0.58%


Other Custodian Quantified Fund-Based

Market Leaders Strategic portfolios
Weekly returns YTD-March returns
Market Leaders Strategic Conservative -0.92% -0.49%
Market Leaders Strategic Moderate -1.69% -1.60%
Market Leaders Strategic Balanced -2.24% -1.32%
Market Leaders Strategic Growth -2.39% -0.44%
Market Leaders Strategic Aggressive -2.52% 0.38%

Market Leaders Strategic/Alternative SAF portfolios
Weekly returns YTD-March returns
Market Leaders Strategic/Alternative SAF Conservative -1.19% -0.38%
Market Leaders Strategic/Alternative SAF Moderate -1.81% -1.24%
Market Leaders Strategic/Alternative SAF Balanced -2.26% -1.04%
Market Leaders Strategic/Alternative SAF Growth -2.37% -0.33%
Market Leaders Strategic/Alternative SAF Aggressive -2.48% 0.32%

Dynamic Fund Profiles portfolios
Weekly returns YTD-March returns
Dynamic Fund Profiles Conservative -1.18% 2.17%
Dynamic Fund Profiles Moderate -1.33% 1.55%
Dynamic Fund Profiles Balanced -1.50% 1.09%
Dynamic Fund Profiles Growth -1.68% 0.72%
Dynamic Fund Profiles Aggressive -1.83% 0.61%



Other Custodian Fusion/Fusion Prime Portfolios

All Fusion portfolios were down for the week at Schwab. Once again, there was a perfect inverse correlation between risk target and return, with the conservative risk target performing the best (-0.88%), and the aggressive risk target performing the worst (-3.64%). Fusion Aggressive was hurt by its large exposure to leveraged NASDAQ 100 and S&P 500 funds. Conversely, Fusion Conservative was helped by having a relatively large allocation to money market, fixed-income, gold-related, and inverse small-cap funds.


Fusion/Fusion Prime Portfolios
Weekly returns YTD-March returns
Fusion Conservative -0.88% -1.78%
Fusion Moderate -1.67% -3.72%
Fusion Balanced -2.40% -5.64%
Fusion Growth -3.24% -6.73%
Fusion Aggressive -3.64% -7.02%


  Underlying Allocations
   
FUSION/FUSION PRIME Conservative Allocation
1.2X Government Bond 20%
2X Dollar 14%
2X S&P 500 11%
Classic 24%
Managed Income Aggressive 12%
Political Seasonality 3%
Inverse Russell 2000 6%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION/FUSION PRIME Moderate Allocation
1.2X Government Bond 15%
2X Dollar 10%
2X S&P 500 21%
2X Emerging Markets 2%
Classic 20%
Managed Income Aggressive 9%
Political Seasonality 2%
2X NASDAQ 100 6%
Inverse Russell 2000 5%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION/FUSION PRIME Balanced Allocation
1.2X Government Bond 10%
2X Russell 2000 4%
2X Dollar 7%
2X S&P 500 29%
2X Emerging Markets 5%
Classic 15%
Managed Income Aggressive 6%
Political Seasonality 1%
2X NASDAQ 100 11%
Inverse Russell 2000 3%
Hedged Gold Bullion 5%
TVA Gold 5%

FUSION/FUSION PRIME Growth Allocation
1.2X Government Bond 4%
2X Russell 2000 6%
2X Dollar 3%
2X S&P 500 36%
2X Emerging Markets 8%
Classic 12%
Managed Income Aggressive 2%
2X NASDAQ 100 18%
Inverse Russell 2000 2%
Hedged Gold Bullion 5%
TVA Gold 5%
FUSION/FUSION PRIME Aggressive Allocation
2X Russell 2000 6%
2X S&P 500 36%
2X Emerging Markets 9%
Classic 7%
Systematic Advantage 3%
2X International Developed 8%
2X NASDAQ 100 21%
Hedged Gold Bullion 5%
TVA Gold 5%

 
Disclosures
     
  Flexible Plan Investments, Ltd. now offers managed account services for both PCRAs and individual accounts at our new custodian. For more information about our newest custodian contact our Sales Department at 800-347-3539 Ext. 2  
     


In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures


 
  April 14, 2014      
Top of page
  Select Alternatives

Select Alternatives fell 2.35% for the week. The strategy was hurt the most by its 31% weighting in the Stone Ridge Small Cap Variance Risk Premium Fund, which was down 3.40% for the week. Small caps were the worst performing capitalization segment last week. Also hurting was the strategy’s exposure to the Catalyst Strategic Insider and Quantified Alternative Investment Funds. The Gold Bullion Strategy Fund helped mitigate some of the underperformance this week.

Disclosures
     
  Select Alternatives combines the diversification and liquidity of alternative investments traditionally available only to hedge funds. Historically, these alternative asset classes have been non-correlated to the broad markets and seek to provide a portfolio both risk management and upside potential.  
     

In My Opinion
What's Happening at Flexible Plan
Last Week in the Market
Strategy Performance
Gold
Quantified Funds
Diversified Bonds
Diversified Tactical Equity
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Next Generation Asset Allocation
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  April 14, 2014      
Top of page
  Strategic Solutions

Last week most of the global equity markets declined, negatively impacting many equity-based strategies. Safe haven bond markets advanced, as did precious metals. This wide divergence of performance played a key role in the leading and lagging strategies this week. The leaders for the week were Systematic Long/Short Bond Trading (1.74%), Hedged Gold Bullion (1.20%), and Managed Income Aggressive (0.99%). Lagging strategies were Fusion Prime Aggressive and Fusion Prime 32 (-3.69%), Market Leaders Equity Only (-3.71%), and WP Aggressive (-5.11%). This range of performance from various strategies and asset classes is among the many reasons Flexible Plan stresses the importance of strategic diversification.

  Weekly returns
Systematic Long/Short Bond Trading 1.74%
Hedged Gold Bullion 1.20%
Managed Income Aggressive 0.99%
Contrarian S&P Trading 0.56%
Diversified Bonds 0.30%
Managed Income 0.06%


Disclosures
     
  Drawing on dozens of different strategies, Strategic Solutions is available for taxable and tax-deferred accounts. Generally, one can combine different strategies in a single account allowing for strategic diversification, not just asset class diversification. Clients and their financial advisors can pick their own strategies ($5,000 per strategy), FPI will choose, monitor and reallocate strategies for you in FUSION ($25,000 minimum), or, for accounts over $100,000, FUSION Prime.  
     

Disclosures  

Past performance does not guarantee future results. The opportunity for profits carries with it the possibility of losses. A complete list of all of our recommendations over the last 12 months is available upon request. Evolution Asset Allocation rankings reflect only the price action of the funds in each family, rather than the indexes reported herein. Such rankings are shorter term and utilize diversification among different funds. Therefore, they may appear to conflict with the longer term, single asset readings of our market indicators. In fact, the differences merely reflect the contrasting objectives and time horizons of each. Index returns are provided for informational purposes only; they are not meant to be applied as benchmarks since the statistical risk and volatility of client portfolios may materially differ from the indexes displayed.

"Model Account" results for the identified investment management strategy(s) shown are time weighted geometrically linked returns.  Except where noted, statistics are taken from single strategy accounts and are representative of our largest mutual fund and variable annuity holdings. These returns reflect actual accounts and dates of Flexible Plan's buy and sell signals. If an account terminates during a period, an alternative single account is substituted. Selection of accounts to serve as "model accounts" is based on the longevity of the account and least number of additions and withdrawals. Accordingly, many of the single accounts serving as 'models' are titled in the name of Flexible Plan's President and controlling shareholder, a person related to Flexible Plan.

If single strategy account histories are unavailable, statistics applicable to such accounts are derived from the exchange history files of each strategy used. Actual buy-sell trading signals and pricing are used in conjunction with such files to create the applicable statistics for each model account. These exchange-history derived returns are believed representative of each strategy's actual results, but the results do not represent the actual experience of any client during the period. Therefore, these results may not reflect the impact that material economic and market factors might have had on the results. Nor do they reflect any problems of execution or pricing that may have been encountered in the actual implementation of the buy and sell signals shown in the exchange history files, the effect of which has not been determined, and may be indeterminable.

SUITABILITY PROFILES: For many strategies Adviser provides suitability based profiles with names such as, without limitation, Conservative, Moderate, Balanced, Growth and Aggressive or with numerical designations such as 25, 40, 60, 80, 100.  Clients should draw no conclusions from such titles.  Rather they are simply a way of designating the hierarchical ranking of Adviser's Profiles within a strategy.  They are not meant to imply any ranking within some universal risk measure or benchmark, nor are they equivalent to a Client's subjective concept of the term.

Enhancements have been made in our methodologies on numerous occasions, which are believed to have had a positive effect on returns. The amount is not precisely quantifiable, but as strategy actual buy and sell signals are used, to the extent described, the effect of these enhancements is reflected. Efforts to develop indicators are ongoing and may result in further changes. Dividends are reinvested.

Utilizing performance between selected dates may not be indicative of overall performance of a profile since the dates chosen by the operator of the program may have been selected to present optimum performance and may not be representative of investment performance of any profile during a different period. Inquiry for current results is always advised. Mutual fund or annuity results will vary based upon their volatility as they relate to the S&P 500 Index or other indices that may be shown.  Specific mutual funds, sub-accounts or indices may materially outperform or under perform these results. Various mutual funds or sub-accounts used in any model account may no longer be available due to the result of advisor's, sponsor's or fund advisor's periodic review, fund consolidations and/or exchange conditions imposed by the funds or annuity.

Reference to popular market indexes are included to demonstrate the market environment during the period shown and are not intended as "benchmarks" Index returns are after dividends. Since Index dividends are posted after the end of each month, they are retroactively prorated on a daily basis (which tends to understate returns if the end date range is inclusive of the current partial month). The investment program for the accounts included in the profiles includes trading and investment in securities in addition to those that may be included in the S&P 500. Such indexes may not be comparable to the identified investment strategies due to the differences between the indexes' and the strategies' objectives, diversification, represented industries, number and type of component investments, their volatility and the weight ascribed to them. No index is a directly tradable investment.

For all strategies, the maximum current management fee in effect is 2.6% annually. Fees are deducted quarterly, in arrears with pro-ration of partial periods. Strategic Solutions strategy(s) may include up to a 1.2% establishment fee at inception. All mutual fund fees and expenses are included to the extent they are reflected in net asset value; other fees may apply. If a front -end fund purchase is contemplated, any commission charged should be deducted. As individual tax rates vary, taxes have not been considered.

For the ETF Market Leaders Strategic Strategies, returns are presented net of approximate trading commissions of $860 annually (but prorated and applied quarterly) on a $150,000 account (minimum of $8.95 per trade with e-delivery of statements - see brochure for details). The trading commissions are the investor's responsibility.

Advisor retains the right to predicate certain of its strategies on trading signals furnished by non-affiliated firms. In each such instance, the non-affiliated firm is under contract to Adviser to provide, and in certain instances, implement all buy and sell directions for management of Client accounts in the associated Advisor strategies. And, as with all third parties, Flexible Plan by necessity relies on their information, data, and software provided, but whose reliability, while believed to be accurate, cannot be guaranteed and losses may result from reliance upon them. These are normal risks for which Flexible Plan takes no responsibility beyond use of reasonable care in its selection of the third party.

Advisors Preferred LLC ("AP"). Pursuant to a contract with AP, Flexible Plan Investments, acting in the capacity of a sub-adviser, provides investment advisory services for select equity, income, derivative and ETF Investments which Flexible Plan also may use in selected strategies regardless of the Investments described as being utilized elsewhere in this Brochure. If these Investments are used in Client's portfolio, since Adviser would receive a fee for its sub-adviser activities, Clients will receive a pro-rata credit on their billing. AP is a federally registered investment adviser and is the adviser of the Gold Bullion Strategy Fund, Gold Bullion Strategy Portfolio and the Quantified family of funds. Flexible Plan Investments, Ltd. serves as investment sub-adviser to The Gold Bullion Strategy Fund and the Quantified funds, distributed by Ceros Financial Services, Inc. (member FINRA). AP is the Funds' investment adviser and is a wholly-owned subsidiary of Ceros Financial Services, Inc. AP is compensated by the funds in its role as investment adviser to the funds on the basis of assets under management in the funds. You may obtain a Prospectus by calling Advisors Preferred LLC at (888) 572-8868 or writing Advisors Preferred, LLC 1445 Research Boulevard, Ste. 530, Rockville, MD 20850 or download the PDF from: www.goldbullionstrategyfund.com or www.quantifiedfunds.com.

An investor should consider the investment objectives, risks, charges and expenses of The Gold Bullion Strategy Fund before investing. This and other information can be found in the Fund's prospectus, which can be obtained by calling 1-855-650-7453. The prospectus should be read carefully prior to investing in The Gold Bullion Strategy Fund.

There is no guarantee that The Gold Bullion Strategy Fund will achieve its investment objectives.

Flexible Plan Investments, Ltd. serves as investment sub-advisor to The Gold Bullion Strategy Fund and the Quantified Funds, distributed by Ceros Financial Services, Inc. (member FINRA). Ceros Financial Services, Inc. and Flexible Plan Investments, Ltd. are not affiliated entities. Advisors Preferred, LLC is the Fund's investment adviser. Advisors Preferred, LLC is a wholly-owned subsidiary of Ceros Financial Services, Inc.

The principal risks of investing in The Gold Bullion Strategy Fund or the Quantified Funds are Risks of the Sub-advisor's Investment Strategy, Risks of Aggressive Investment Techniques, High Portfolio Turnover, Risk of Investing in Derivatives, Risks of Investing in ETFs, Risks of Investing in Other Investment Companies, Leverage Risk, Taxation Risk, Concentration Risk, Gold Risk, Wholly-owned Corporation Risk, Risk of Non-Diversification and interest rate risk. "Gold Risk" includes volatility, price fluctuations over short periods, risks associated with global monetary, economic, social and political conditions and developments, currency devaluation and revaluation and restrictions, trading and transactional restrictions.