hotline

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


Disclosures
 

To our readers
Everything in the newsletter pertains to strategies available on our Strategic Solutions platform at Trust Company of America. 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 Market Leaders. If so, that newsletter section may interest you.


 
  July 28, 2014        
  In my opinion
by Jerry Wagner
 

Who’s “Mr. Excitement” and what’s he got to do with stocks?

Born here in Detroit in 1934, he died just short of 50 years later after lying in a coma for nine years. In 1975 he had a heart attack on stage while singing his hit single “Lonely Teardrops,” reportedly as he mouthed the lyric “My heart is crying.” Much earlier a royalty dispute between his managers had led Barry Gordy to split and form Hitsville USA (Motown records). “Mr. Excitement,” as he was known, thrilled fans worldwide doing the splits and sip sliding across the stage while he sang R&B and soul throughout the fifties, sixties, and seventies.

Selling millions of records, he caused Barry Gordy, who wrote his first two hits, to proclaim that he was "The greatest singer I've ever heard.” And Michael Jackson dedicated his Grammy for the Thriller album to him and his influence on Jackson’s career.

As I watched the stock market last week, one of Jackie Wilson’s greatest hits, later covered and taken to number 2 on the charts by Rita Coolidge and featured in the “Ghostbusters 2” movie, kept repeating in my head:

"Your love is lifting me higher than I’ve ever been lifted before.”

Watch and listen to the great Jackie Wilson here

The stock market did just that last week as new highs were hit by the S&P 500 on both Wednesday and Thursday. But it’s not clear that “love” was doing the lifting. Instead, the market seemed to be climbing the proverbial “wall of worry,” this time created from foreign concerns, a slow economy and fears about the new direction for Fed actions appearing on the distant horizon.

Here at Flexible Plan, though, we were not just celebrating the stock market’s new highs but new all-time highs registered by our FUSION and STF Indexes that are calculated by a unit of the New York Stock Exchange to track seven of our strategy indexes. The six FUSION and one STF indexes are available online through CNBC, Yahoo! Finance, Morningstar Direct, and Bloomberg. (See the FUSION and STF articles later in this issue of the Market Hotline for more details on how to connect.)

Check FUSION Aggressive here and STF here

What’s great about these NYSE Indexes is that you can now follow our indexes daily. And most of these services have the strategy histories back to 1998. That means their hitting new all-time highs now is a very big deal around here.

Indexes themselves are interesting financial market creations. For over 100 years there have been a handful of stock market indexes that investors have watched as a short-hand way of gauging what the stock market was doing. The Dow Jones Industrial Average was the grandfather of them all. But because the average was price-weighted and only included 30 stocks, it was slowly replaced by the broader cap-weighted S&P 500 Index in the years after its 1928 introduction.

As the financial markets grew, more stock indexes appeared, and then bond indexes entered the scene in force. While we thought there had been an explosion in these indexes in the seventies and eighties, we actually “hadn’t seen noth’n yet”!

With the advent of Exchange Traded Funds (ETFs), the number of indexes seemed to climb into the stratosphere. At first the ETFs merely cloned indexes that were already established, like the Dow and the S&P. But as the ETF market matured, the process was reversed. Indexes were created to provide the basis for the creation of an ETF to mirror its behavior.

Funny thing about this proliferation of indexes that we all cite and depend upon, as the fine print always states, they can’t be traded. None of these indexes (including the Dow and the S&P that we see in the newspaper and online) reflect actual trading. But they do show the application of a methodology to a group of stocks or other asset categories. They don’t reflect the expenses of trading (price slippage for large orders, bid-asked spreads, and commissions) and they don’t reflect any associated management fees that always exist in the real world (someone must be paid to compile and trade the index methodology). Nor do they reflect the lack of discipline or process that may exist by one trying to trade the index’s methodology on their own in the face of real world crises.

Jackie Wilson sang, in words that probably resound in every investor’s heart who saw their finances following the stock market indexes lower in 2007-2008:

“Now once I was downhearted
Disappointment was my closest friend.”

Yet, in the song he demonstrated that in the face of disappointment, he stuck with his plan, as he continued:

“But then you, came
and he soon departed
And you know he never
Showed his face again”

While the rebound from the 2008 financial crisis is a similar recovery, I would not use “never” when it comes to the stock market. But sticking with an investment plan through thick and thin is what indexes demonstrate.

This stick-to-it-ness may be necessary in the short run. As I have written since the first of the year, I expect the market to have its first 10% correction yet this year. While this has already occurred in some indexes, like the Russell 2000 Small-Cap Index, and I could claim that my prognostication has already been fulfilled, I do expect to see it occur in the S&P as well at some point. After all, it has been over 1,000 days since we had a 10% or greater set back (the fifth longest time in stock market history without such a downturn).

However, unless you are especially nimble and have your own market timing plan and the discipline to trade it, I have also been recommending that investors ignore such a possibility and stick with their stock investments.

I base this on the fact that none of the longer-term indicators that we follow have turned south. And just as we are in the fifth longest time without a correction, there have been four other times when the wait for such an occurrence has been even longer.

Yet there are a number of indications that stocks may be peaking in the short term. We are overbought (the market has moved higher much faster than average and may need to cool off), many indicators of market breadth, volume, and volatility are not as strongly positioned as the indexes, and seasonality is especially weak during the next two weeks (historically prices have fallen more often than they have risen during this period).

Still, we stay focused on other indicators. Second quarter earnings and revenue reports continue to come in, and over 60% of companies are beating analyst estimates on both concerns.

Interest rates remain low. Investors must ask themselves, “Would they rather buy a 10-year government bond yielding about 2.5%, or S&P 500 stocks that are averaging 80% of that yield and have the potential for price appreciation?” The comparisons overseas are even more attractive for stocks of countries like England and Germany, where average stock yields actually surpassed their comparable government bond yields.

The intermediate- and long-term price trends remain solidly bullish, and bullish market sentiment of investors remains inexplicably low in the face of the new market highs being experienced by the S&P 500 and our FUSION and STF Indexes. And the percent bearish actually exceeds the percentage of bulls. No overconfidence being exhibited here!


Source: Bespoke Investment Group

Finally, I have been reporting for more than a month that reports on the economic state of our economy have been decidedly negative. More reports have disappointed than have exceeded expectations. Last week that changed. Although we only had fifteen reports, ten beat economists’ expectations. This week we have over 30 reports slated. We will see if this new direction can continue and become the basis of a new trend and support a resumption in the quest for “higher and higher” new highs.

When we created the FUSION and STF Indexes, we took our FUSION and STF methodologies and applied it to actual account results and real world asset class indexes that all pre-existed our methodology. All the indexes do is apply the trading methodology to real-world numbers in the past to give us an idea of how that methodology would have traded in the past market environments.

While we have traded the underlying STF (2009) and FUSION (2013) methodologies for quite some time, the new indexes open up a new transparency for investors thinking about using them. Now as these methodologies continue to be traded by us in the real world, a benchmark index is posted daily to allow the world to watch their progress. So far, as Jackie sang, they keep lifting us “higher and higher.”

All the best,

Jerry

PS: For more on Jackie Wilson’s life, here’s an early ABC report:

Jackie Wilson – The man behind the music


     
  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
Dynamic Fund Profiles
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures
 
  July 28, 2014      
Top of page
  What's happening at Flexible Plan

Jerry Wagner Panelist at Denver Conference

This Thursday, July 31st, Jerry Wagner will be a panelist at the Innovative Alternative Investment Strategies Conference to be held at the Denver Convention Center. The topic, “The Many Paths to Real Assets, Commodity & Currency Investing,” will explore a variety of ways to gain exposure in these uncorrelated asset classes, including The Gold Bullion Strategy Fund (QGLDX), Flexible Plan’s sub-advised 40-Act gold fund.

Advisors attending the two-day conference are invited to visit Jerry, along with Renee Toth, Executive VP, at the Advisors Preferred booth to learn more about the Fund and Flexible Plan’s separately managed accounts that take advantage of this alternative asset class.






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


Disclosures


 
  July 28, 2014      
Top of page
  Last week in the market

Mixed week for major U.S. indices

Across five days filled with earnings news and geopolitical concerns, the Dow fell 0.83% to 16,960.57, the Nasdaq gained 0.40% to 4,449.56, and the S&P 500 went flat for the week, retreating just 0.03 points and settling Friday at 1,978.34.4,5

% Change Y-T-D 1-Yr Chg 5-Yr Avg 10-Yr Avg
DJIA
+2.32
+9.03
+17.30

+7.03

NASDAQ
+6.54
+23.42
+25.27
+14.20
S&P 500
+7.03
+17.04
+20.40
+8.25
Real Yield 6/13 Rate 1-Yr Ago 5-Yrs Ago 10-Yrs Ago
10Yr TIPS Yd
0.26%
0.38%
1.81%
1.96%

  YTD - June
DJIA
+1.51%
NASDAQ
+5.54%
S&P 500
+6.05%

Sources: USATODAY.com, bigcharts.com, treasury.gov - 7/25/145,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.



Yearly inflation at 2.1%

In June, the headline Consumer Price Index recorded annualized inflation at that level for a second consecutive month. Back in February, yearly consumer inflation was down at 1.1%. June saw the CPI rise 0.3% and the core CPI (minus food and energy prices) advance 0.1%; core CPI was up 1.9% year-over-year.1



Contrasting home sales numbers in June

The Census Bureau announced an 8.1% June drop in new home buying, which left 5.8 months of inventory in the market (the most since October 2011). New home prices were up 5.3% year-over-year. Existing home sales picked up 2.6% in June; that was the second straight monthly gain, pushing the seasonally adjusted annual sales rate above the 5 million mark for the first time since October.2



More demand for durables

Hard goods orders improved 0.7% in June; analysts polled by Bloomberg projected a 0.5% advance. The Commerce Department also announced a 3.5% yearly gain.3



Citations

1 -investing.com/economic-calendar/ [7/25/14]
2 - cbsnews.com/news/new-home-sales-plunge-8-1-percent/ [7/24/14]
3 - usatoday.com/story/money/business/2014/07/25/durable-goods/13148389/ [7/25/14]
4 - google.com/finance?q=INDEXSP%3A.INX&ei=iMzSU8i-Der8igLgzYGgAg [7/25/14]
5 - usatoday.com/money/markets/overview/ [7/25/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F25%2F13&x=0&y=0 [7/25/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F25%2F13&x=0&y=0 [7/25/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F25%2F13&x=0&y=0 [7/25/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F24%2F09&x=0&y=0 [7/25/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%24F2%2F09&x=0&y=0 [7/25/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F24%2F09&x=0&y=0 [7/25/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F26%2F04&x=0&y=0 [7/25/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F26%2F04&x=0&y=0 [7/25/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F26%2F04&x=0&y=0 [7/25/14]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/25/14]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/25/14]


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


Disclosures



 
  July 28, 2014      
Top of page
  Gold

Is the Dollar really losing its status as the world's reserve currency?

“From JP Morgan’s Eye on the Market, Outlook 2012:

“So far, the US Treasury has survived based on the kindness of strangers: foreign central banks increasing their holdings, and purchases by the Fed. It pays to be the world’s reserve currency (c 37 below), which is helping prevent the kind of market revolt that sent European debt markets reeling. However, with the backdrop below, I am reminded of the following remark from late MIT economist Rudiger Dornbusch: ‘Crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought’.” Mary Callahan Erdoes, Chief Executive Officer, J.P. Morgan Asset Management.



Loss of Reserve Currency Status → Lower Dollar → Gold higher.

  Hedged Gold Bullion
Top of page

Hedged Gold Bullion lost 0.37% last week. The 25% hedge in the ProFunds Inverse Precious Metals Fund (SPPSX, unchanged) did not offset poor returns from the 65% weighting in The Gold Bullion Strategy Fund (QGLDX, -0.50%).


  TVA Gold
Top of page

TVA Gold was down 0.28% for the week, while The Gold Bullion Strategy Fund (QGLDX) was down 0.50% for the same period, despite being 76% exposed to the metal, on average, for the week. The strategy began the week 80% long, changing to 60% long on Monday’s close as volatility in the gold market had increased somewhat over the prior week. In pulling back on Monday’s close, the strategy was able to avoid a sell-off and subsequent rebound on Thursday and Friday, leading to a somewhat better performance than average exposure would suggest.

Disclosures

     
  TVA Gold trades The Gold Bullion Strategy Fund (QGLDX) using Flexible Plan’s proprietary Targeted Volatility Analysis (TVA). TVA uses the precious metal’s past volatility to position the account in a portfolio divided between the gold bullion fund and a money market or bond mutual fund. The objective of the strategy is to allow participation in a portion of the returns of gold while targeting a lower level of risk. The advantage of this is the opportunity to create a return stream equivalent to that experienced with equities but at less risk than either gold or the S&P 500 Index has historically yielded.  
     

  The Gold Bullion Strategy Fund
Top of page

Over the week, the gold spot price lost 0.30% while the US Dollar strengthened. The Gold Bullion Strategy Fund (QGLDX) lost 0.50% for the week. The difference was mostly 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 lost 0.44%.

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
Dynamic Fund Profiles
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  July 28, 2014      
Top of page
  Quantified Funds

US equity markets were mixed last week. The NASDAQ Composite gained 0.39%, the S&P 500 was up 0.01%, and the Dow Jones Industrial Average recorded a weekly loss of 0.82%. Six of the ten S&P industrial sectors were down for the week. The move downward was led by Consumer Discretionary (-1.03%), Industrials (-0.95%), Consumer Staples (-0.82%), and Utilities (-0.72%). Except for the Quantified Market Leaders Fund (QMLFX), which was down 0.36%, the Quantified Funds ranged from up to flat. The largest gain was in the Quantified All-Cap Equity Fund (QACFX, 0.39%), followed by the Quantified Managed Bond Fund (QBDSX, 0.10%), and then the Quantified Alternative Investment Fund (QALTX, 0.0%).

The Quantified All-Cap Equity Fund (QACFX) made slight changes last week, shifting its weightings in four leading stock baskets, which were over 35% of the portfolio’s composition: “All-Cap- Margin” (16%), “CMPS- Double 10 Dividend and Growth” (10%), “All-Cap Est EPS Revision Upward” (7%), and “All-Cap Kirkpatrick Bargain” (5%). Among domestic sector distributions, Information Technology and Industrials led with portfolio allocations of 12% and 13%, respectively. The largest stock holdings in the All-Cap portfolio were in the common stock of Skechers USA Inc. (SKX, 2.06%) and the common stock of Trinity Industries (TRN, 2.05%).

The cash level within the All-Cap Fund remained at 10% last week. The Fund’s daily pattern trading of S&P 500 futures started and ended the week at 6% long. Our TVA-based futures hedge position was neutral throughout the week.

The Market Environment Indicator (MEI) remained bullish last week. With the adjustment in the Quantified Market Leaders Fund (QMLFX) since the beginning of June, equity asset class allocations remained the same from the prior week: Large-Cap Growth (12%), Large-Cap Value (12%), Mid-Cap Growth (12%), Mid-Cap Value (12%).

Total sector ETF weightings remained at 52% last week. Distribution of sector holdings and weights were as follows: Electronics (11%), Real Estate (13%), Energy Services (13%), Technology (2%), and Biotech (13%). The individual ETF positions with the leading portfolio weightings were the iShares Russell Midcap Value Index ETF (IWS, 7.5%), the Ultra Dow 30 ProShares ETF (DDM, 6.7%), ProShares Ultra Nasdaq Biotechnology ETF (BIB, 6.5%), and the Ultra Real Estate ProShares ETF (URE, 6.0%).

Within the Quantified Alternative Investment Fund (QALTX), the Long/Short Market Neutral Alternative sub-portfolio increased allocation to the Dreyfus Global Alpha I Fund (AVGRX, 2.00%).

Among the largest ETF positions there were a few changes: allocation to the First Trust ISE Water Index ETF (FIW, 1.5%) and the Wisdom Tree Managed Futures Strategy ETF (WDTI, 0.67%) decreased, while allocation to the PowerShares Global Water ETF (PIO, 2.75%) and the PowerShares Aerospace & Defense ETF (PPA, 1.88%) increased.

The cash level within the Fund decreased to 9.65% last week. The daily pattern trading of S&P 500 Index futures with 10% fund capital allocation started and ended the week 3.0% long. The 7.5% capital allocation of the volatility-based systematic trading of NASDAQ 100 Index futures started the week 9% long, changed to 7.5% long on Monday’s close, 9% long on Tuesday’s close, and 10.5% long on Friday’s close 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, 0.07%) and the Peritus High Yield Bond ETF (HYLD, 0.41%), were up for the week.

The 10-year US Treasury yield decreased to 2.47% for the week. The Fund increased weightings in the SPDR Barclays Capital International Treasury Bond ETF (BWX) from 7.9% to 8.8%, while decreasing allocations in the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) from 6.1% to 5.3%.

The 10% active portfolio exposure to 30-Year US Treasury Bond futures in the Fund started the week long, changed to short on Monday’s close, long on Tuesday’s close, and short on Wednesday’s close to begin this week. The position lost around 0.01%.

Fund (Inception) Symbol Qtr Ending 6/30/14 1 Year Ending 3/31/14 Since Inception Ending (7/25/14) Annual Expense Ratio
The Gold Bullion Strategy Fund (7/5/13) QGLDX 2.71% N/A 3.41% 1.55%
Quantified Managed Bond Fund (8/9/13) QBDSX 1.68% N/A 3.07% 1.68%
Quantified All-Cap Equity Fund (8/9/13) QACFX 0.99% N/A 4.67% 1.51%
Quantified Market Leaders Fund (8/9/13) QMLFX 4.62% N/A 11.31% 1.71%
Quantified Alternative Investment Fund (8/9/13) QALTX 2.34% N/A 11.19% 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
Dynamic Fund Profiles
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  July 28, 2014      
Top of page
  Diversified Bonds

Diversified Bonds fell 0.11% last week, as four of the component strategies advanced less than the three that declined. Global Maturities was the leading strategy while Managed Income Aggressive was the lagging strategy for the week.

Strategy Weekly returns YTD - June returns Allocation
Diversified Bond Portfolio -0.11% 2.00%  
Government Bond Trading* -0.44% 3.54% 12%
Strategic High Yield Bond 0.05% 3.33% 21%
Systematic Long/Short Bond Trading -1.00% -12.23% 6%
Global Maturities 0.27% 3.36% 21%
Managed Income 0.10% 3.68% 21%
Managed Income Aggressive -1.79% 5.05% 5%
Managed Income - 100% SAF 0.05% 2.44% 14%

*Start date March 11, 2014

  Strategic High Yield Bond
Top of page

Strategic High Yield Bond continued to hold its 100% invested position in a high-yield bond fund, gaining 0.05% 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
Dynamic Fund Profiles
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  July 28, 2014      
Top of page
  Diversified Tactical Equity

Diversified Tactical Equity advanced 0.15% last week, even though only three of its ten component strategies gained. The seven that declined only did so fractionally while the three that advanced made meaningful contributions to the portfolio. Self-adjusting Trend Following and Third Day Tactical Blend gained top leadership honors as Classic and Market Leaders Dynamic Aggressive lagged the strategy performance list.

Strategy Weekly returns YTD - June returns Allocation
Diversified Tactical Equity 0.15% 1.44%  
Classic -0.57% 3.43% 7%
Contrarian S&P Trading -0.05% 0.55% 11%
Gold Equities Trading -0.05% -0.78% 12%
Market Leaders Dynamic Aggressive -0.22% 4.46% 10%
Political Seasonality Index -0.05% 0.84% 6%
S&P Tactical Patterns -0.06% -0.21% 12%
Self-adjusting Trend Following 1.18% 2.47% 11%
Systematic Advantage -0.10% 6.60% 10%
Third Day Tactical Blend 0.63% -6.02% 12%
Volatility Adjusted NASDAQ 0.54% 5.55% 11%


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  
     
 
  Classic Update
Top of page

Classic fell 0.57% last week, as all four of its positions declined modestly. All Classic accounts remained fully invested last week.

  Political and Seasonal Tendencies
Top of page

Political Seasonality Index maintained its 100% position in money market, which was established the prior week.

PSI Chart

  S&P Tactical Patterns
Top of page

S&P Tactical Patterns (SPTP) lost 0.06% last week. The strategy had a 60% long exposure to the S&P 500 Index throughout last week.


Disclosures

     
  S&P Tactical Patterns seeks out daily patterns in the S&P 500 Index price direction. Markets reflect human emotions. Investors adopt patterns of behavior in response to those emotions. S&P Tactical Patterns seeks out high probability, repeatable patterns in the S&P 500 Index to identify periods to buy, use leverage, or go short (or inverse) to the market. More information  
     


  Self-adjusting Trend Following
Top of page

The NASDAQ 100 bucked the losses last week with a gain of 0.64% on the back of strong earnings reports. STF, at 2X, rose approximately 1.2%. The trends remain strong and clear, and will likely keep STF double-long as the bulk of the S&P 500 companies report this week, along with a slew of economic data.

Outside of good news from Facebook and Apple, other big players like Qualcomm and Amazon disappointed. Good enough reports like Microsoft's kept the index afloat amid the geopolitical turmoil.

We are past the headliners for the NASDAQ 100 in many ways now. Earnings will still come in, but among stocks with less capitalization. If the broader market rallies on good earnings, good economic or political news, expect the NASDAQ to participate.


SELF-ADJUSTING TREND FOLLOWING (STF) INDEX

The STF index was launched earlier this year. The index was calculated by the NYSE using the same rule set and tradable securities that are used in our STF managed account service. In other words, the index was designed to track the STF portfolio management strategy.

The index reached a new high for the year last week. The index does not represent any particular account or custodian. Also note that an index does not include management fees in its calculation. Despite any differences between the index and actual managed accounts, the index may be used as an indicator of how STF is likely performing.

We have contacted the primary quote services in order to make this index widely available. Each service publishes the current and historical data on different schedules. Some services require a period or carrot (^) before the ticker symbol which is FPSTF. For example, at www.CNBC.com, a period preceding the ticker will bring up the quote.

Here’s the link to FPSTF at CNBC.

 
  Third Day Tactical
Top of page

Third Day Tactical Blend gained 0.63% and Third Day Tactical Blend Balanced gained 0.45% last week. We held a long position on Monday, moving to cash at Monday’s close.


Weekly returns YTD - June returns
Third Day Tactical Blend 0.63% -6.02%
Third Day Tactical Blend Balanced 0.45% -4.88%
  Volatility Adjusted NASDAQ
Top of page

Volatility Adjusted NASDAQ was up 0.54% for the week, while the NASDAQ 100 was up 0.64%. VAN was 1.16X long on average for the week. The performance disparity highlights the mean-reverting nature of the index over the week. While VAN outperformed relative to its own exposure last week, due to market movements this week, it underperformed on a relative exposure basis. Over the long term, these effects should net to zero.


Disclosures

     
  Volatility Adjusted NASDAQ evaluates the current short-term volatility risk in the NASDAQ 100 Index relative to its long-term historical average on a daily basis. Equity markets do best during periods of low volatility, while most declines are presaged by higher volatility. The VAN strategy takes advantage of this relationship. In addition, it utilizes the market trend to seek to avoid missed opportunities and market declines not detected in advance by measures of volatility. 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
Dynamic Fund Profiles
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  July 28, 2014      
Top of page
  Dynamic Fund Profiles

All of the DFP suitability profiles continued the re-sampled efficiency portfolio allocations in place since early May, and over last week, all profiles declined. The underlying sub-advised funds were mixed over the week: the Quantified All-Cap Equity (QACFX, +0.39%) and the Quantified Bond Funds (QBDSX, +0.10%) gained. The Quantified Alternative Investment Fund (QALTX, 0.00%) was flat, while The Gold Bullion Strategy Fund (QGLDX, -0.50%) and the Quantified Market Leaders Fund (QMLFX -0.36%) were down.

Dynamic Fund Profiles (DFP) Allocation May – August 2014

  Quantified Market Leaders Fund (QMLFX) Quantified All-Cap Equity Fund (QACFX) Quantified Managed Bond Fund (QBDSX) Quantified Alternative Investment Fund (QALTX) The Gold Bullion Strategy Fund (QGLDX)
DFP Conservative 13.99% 21.79% 28.17% 26.43% 9.62%
DFP Moderate 21.24% 23.51% 23.16% 22.46% 9.63%
DFP Balanced 24.27% 24.93% 16.61% 24.55% 9.64%
DFP Growth 26.87% 26.57% 10.24% 26.65% 9.67%
DFP Aggressive 29.17% 28.39% 4.02% 28.75% 9.67%

Dynamic Fund Profiles (DFP) Recent Net-of-Fee Performance:

 

Weekly Return
(7/18-7/25/2014)

YTD-June returns
Dynamic Fund Profiles Conservative -0.03% 3.71%
Dynamic Fund Profiles Moderate -0.07% 3.25%
Dynamic Fund Profiles Balanced -0.07% 2.88%
Dynamic Fund Profiles Growth -0.09% 2.58%
Dynamic Fund Profiles Aggressive -0.10% 2.54%


Disclosures

     
  Dynamic Fund Profiles uses the latest in asset allocation technology – Resampled Efficiency. A patented process, Resampled Efficiency seeks to overcome deficiencies in traditional optimization, namely the assumption that each asset class will return exactly what history has shown. It builds uncertainty into its analysis resulting in increased diversification. 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
Dynamic Fund Profiles
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  July 28, 2014      
Top of page
  Faith Focused Investing

Faith Focused Investing portfolios ended down for the week as the majority of the equity and bond positions were mixed. There were no 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 - June returns
Faith Focused Investing Aggressive -0.03% 1.39%
Faith Focused Investing Growth -0.04% 1.52%
Faith Focused Investing Balanced -0.05% 1.59%
Faith Focused Investing Conservative -0.05% 1.79%
Faith Focused Investing Moderate -0.06% 1.63%

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
Dynamic Fund Profiles
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  July 28, 2014      
Top of page
  Fusion

This past week the portfolio performance ranged from 0.80% to 0.30% from the more aggressive to the more conservative end of the performance spectrum. Performance was largely driven by allocations to 2X emerging market and 2X NASDAQ 100 funds. Allocations to gold and 2X Russell 2000 funds weighed on performance.

Volatility not only continues to hover near historic lows (the VIX is near where it was a year ago), but continues to exhibit low volatility itself. In this environment, Fusion is likely to select enhanced beta (leveraged) funds in order to achieve the targeted return and risk profile at every level. This is a deliberate intent to try and achieve the performance expectations of clients given the drawdown limitations each client has provided us in their suitability questionnaire responses. Adjustments are made to 50% of the asset class and strategy allocations within each Fusion portfolio each week for accounts custodied at Trust Company of America. This makes the Fusion portfolios at all risk profile levels more sensitive to changes in direction, volatility, and correlation of markets. In addition, the individual strategies may make position changes at any time.

Fusion portfolios Weekly returns YTD - June returns
Fusion Growth 0.74% -1.30%
Fusion Aggressive 0.73% -0.54%
Fusion Balanced 0.72% -1.40%
Fusion Enhanced Income 0.69% -1.80%
Fusion Moderate 0.66% -1.78%
Fusion Conservative 0.51% -2.27%


FUSION INDEXES

Listed below are the Fusion indexes that were launched in March of this year. Each of these indexes reached a new high for the year last week.

The indexes are calculated by the NYSE and are designed to track the primary Fusion risk profiles. It is important to understand that all of these indexes are based on the same Fusion methodology used in managing client accounts; however, they do not represent any particular account or custodian. The indexes may also have a different periodicity from when Fusion makes changes to the portfolio allocations versus Fusion with managed accounts at various custodians. And, also note that indexes do not incorporate management fees. Despite these differences, the indexes may be used as an indicator of how the Fusion risk profiles are likely performing.

We have contacted the primary quote services in order to make these indexes widely available. Each of these services publish the current and historical data on different schedules. Some services require a period or carrot (^) before the ticker symbol. For example, at www.CNBC.com, a period preceding the ticker will bring up the quote.

Fusion Index Ticker*
Flexible Plan Aggressive Fusion Index FPFA
Flexible Plan Balanced Fusion Index FPFB
Flexible Plan Conservative Fusion Index FPFC
Flexible Plan Enhanced Income Fusion Index FPFE
Flexible Plan Growth Fusion Index FPFG
Flexible Plan Moderate Fusion Index FPFM


  FUSION underlying allocations (TCA)
   
Allocations PDF  


  FUSION PRIME underlying allocations (TCA)
   
Allocations PDF  


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
Dynamic Fund Profiles
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  July 28, 2014      
Top of page
  Lifetime Evolution

Lifetime Evolution portfolios gained during the week. The holdings had mixed results, while Emerging Markets and Large Cap positions dominated and gained over 1% during the week. There were no changes to the portfolios last week, and all portfolios were fully invested according to their risk profile.

Last week, the Lifetime Evolution profiles returned:

Lifetime Evolution profiles
Weekly returns YTD - June returns
Lifetime Evolution Aggressive 0.17% 0.18%
Lifetime Evolution Growth 0.16% 0.43%
Lifetime Evolution Balanced 0.16% 0.61%
Lifetime Evolution Moderate 0.14% 0.84%
Lifetime Evolution Conservative 0.12% 1.44%

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
Dynamic Fund Profiles
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  July 28, 2014      
Top of page
  Market Leaders

It was a small roller coaster ride for the markets last week. The S&P 500 scratched out two new highs mid-week, but gave back all of the gains on Friday: the Dow Jones Industrial Average lost 0.8%, the Russell 2000 declined 0.6%, with only the NASDAQ showing any improvement by gaining 0.4%.

The same mix of small gains and losses occurred within the leading asset classes, while the leading sectors were also mixed but the individual moves much larger. At the end of the day, the mixture of gains and losses canceled each other – it was a flat week.

Rank
  Asset Class % change (7/18-7/25/14)  
#1   Mid-Cap Value (Strategic & Tactical) -0.2%  
#2   Large Value (Strategic & Tactical) -0.1%  
#3   Mid-Cap Growth (Strategic & Tactical) 0.2%  
#4   Large Growth (Strategic & Tactical) 0.1%  
    S&P 500 Index 0.0%  
    All Country World Index 0.1%  
    Aggregate Bond Index 0.1%  

SECTORS

It was also a mixed week for the sectors, with two outperforming the benchmark S&P – one very dramatically – and two underperforming, but again one dropping enough to offset the winner.

  • Electronics, which had been a big winner for many weeks, was hit hard with profit taking and fell 3.8%
  • Biotechnology was the big winner, gaining 3.6% and offsetting the majority of the loss from Electronics
  • Political unrest and a growing economy pushed Energy Services up by 0.5%
  • A 0.5% decline in Real Estate offset the gains in Energy Services
Sector Leadership % change (7/18-7/25/14)
Electronics -3.8%
Biotechnology 3.6%
Energy Services 0.5%
Real Estate -0.5%

Both risk management indicators, TVA (Targeted Volatility Analysis) and the MEI (Market Environment Indicator) remain bullish, and therefore all of the Market Leaders profiles remain fully invested and participating in the current rally.

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) Electronics (RYSAX), Biotechnology (RYOAX), Energy Services (RYVAX), and Real Estate (RYREX)


Dynamic Weekly returns YTD - June returns
Market Leaders Dynamic Conservative 0.20% 4.87%
Market Leaders Dynamic Moderate 0.15% 4.74%
Market Leaders Dynamic Balanced 0.03% 4.59%
Market Leaders Dynamic Growth -0.06% 4.55%
Market Leaders Dynamic Aggressive -0.22% 4.46%
Strategic Weekly returns YTD - June returns
Market Leaders Strategic Conservative -0.19% 0.15%
Market Leaders Strategic Moderate -0.24% 0.51%
Market Leaders Strategic Balanced -0.26% 1.00%
Market Leaders Strategic Growth -0.29% 1.97%
Market Leaders Strategic Aggressive -0.30% 3.21%
Tactical Weekly returns YTD - June returns
Market Leaders Tactical Conservative 0.23% 5.38%
Market Leaders Tactical Moderate 0.10% 4.83%
Market Leaders Tactical Balanced -0.02% 4.47%
Market Leaders Tactical Growth -0.12% 4.01%
Market Leaders Tactical Aggressive -0.28% 3.67%

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
Dynamic Fund Profiles
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  July 28, 2014      
Top of page
  Other Custodians

ETF

The Rotational No-Load/SAF and Market Leaders ETF portfolios were essentially unchanged at Schwab this week,
while the Rotational No-Load portfolios ranged from 0.33% (aggressive) to 0.14% (conservative). The SAF portfolios
benefitted from Large Cap and Emerging Market equity exposure.

ETF Market Leaders portfolios
Weekly returns YTD - June returns
ETF Market Leaders Aggressive 0.03% 0.92%
ETF Market Leaders Balanced 0.03% -1.04%
ETF Market Leaders Growth 0.02% -0.28%
ETF Market Leaders Moderate 0.02% -0.66%
ETF Market Leaders Conservative 0.02% -0.50%

Rotational No-Load ETF portfolios
Weekly returns YTD - June returns
Rotational No-Load ETF Aggressive 0.33% 2.30%
Rotational No-Load ETF Growth 0.32% 1.75%
Rotational No-Load ETF Balanced 0.30% 1.30%
Rotational No-Load ETF Moderate 0.27% 0.67%
Rotational No-Load ETF Conservative 0.14% 0.00%

Rotational No-Load ETF/SAF portfolios
Weekly returns YTD - June returns
Rotational No-Load ETF/SAF Aggressive 0.01% 3.02%
Rotational No-Load ETF/SAF Growth -0.01% 2.39%
Rotational No-Load ETF/SAF Balanced -0.02% 1.74%
Rotational No-Load ETF/SAF Moderate -0.01% 1.25%
Rotational No-Load ETF/SAF Conservative -0.02% 1.09%


Other Custodian Quantified Fund-Based

Market Leaders Strategic portfolios
Weekly returns YTD - June returns
Market Leaders Strategic Conservative -0.22% 2.31%
Market Leaders Strategic Moderate -0.35% 1.82%
Market Leaders Strategic Balanced -0.37% 2.26%
Market Leaders Strategic Growth -0.39% 3.27%
Market Leaders Strategic Aggressive -0.41% 4.23%

Market Leaders Strategic/Alternative SAF portfolios
Weekly returns YTD - June returns
Market Leaders Strategic/Alternative SAF Conservative -0.19% 2.21%
Market Leaders Strategic/Alternative SAF Moderate -0.29% 1.83%
Market Leaders Strategic/Alternative SAF Balanced -0.30% 2.16%
Market Leaders Strategic/Alternative SAF Growth -0.33% 2.98%
Market Leaders Strategic/Alternative SAF Aggressive -0.34% 3.74%

Dynamic Fund Profiles portfolios
Weekly returns YTD - June returns
Dynamic Fund Profiles Conservative -0.03% 3.71%
Dynamic Fund Profiles Balanced -0.07% 2.88%
Dynamic Fund Profiles Moderate -0.07% 2.88%
Dynamic Fund Profiles Growth -0.09% 2.58%
Dynamic Fund Profiles Aggressive -0.10% 2.54%



Other Custodian Fusion/Fusion Prime Portfolios

Performance ranged from 0.76% to 0.42% from the more aggressive to the more conservative portfolio allocations. This is well aligned with the risk profiles that were designed as part of Fusion. The better performance at the more aggressive end of the risk profile range was largely due to allocations to indexes and strategies that had positions in 2X NASDAQ 100 and 2X emerging markets funds. Weighing on performance were allocations to the Russell 2000 and gold.

While volatility remains near multi-year lows, Fusion is likely to select enhanced beta funds in order to achieve the targeted return and risk at every risk profile level. Monthly adjustments are made to asset class and strategy allocations within each Fusion portfolio. In addition, the individual strategies within each portfolio may make position changes at any time.

Fusion/Fusion Prime Portfolios
Weekly returns YTD - June returns
Fusion Aggressive 0.76% -0.97%
Fusion Growth 0.76% -2.60%
Fusion Balanced 0.64% -2.68%
Fusion Moderate 0.56% -1.84%
Fusion Conservative 0.42% -1.05%

  Underlying Allocations (Schwab)
   
Allocations PDF




Jefferson National Monument Advisors Fusion/Fusion Prime Portfolios


This past week portfolio performance ranged from 1.05% to 0.44% from the more aggressive to the more conservative portfolio allocations. The difference in performance between the aggressive versus the conservative end of the risk profile range was driven by exposure to equities. In particular, the more aggressive risk profiles tended to have larger allocations to strategies and indexes that allocated to 2X NASDAQ 100 funds and related strategies. The more conservative strategies had lesser allocations to the 2X NASDAQ 100 and larger allocations to fixed income related strategies.

Volatility continues to hover near a multi-year low. In this low volatility investment environment, Fusion is likely to select enhanced beta funds in order to achieve the targeted return and risk profile at every level. Approximately every 31 days adjustments are made to asset class and strategy allocations within each Fusion portfolio. In addition, the individual strategies within each portfolio may make position changes at any time.

Below is a link to the Fusion allocations for the Fusion Jefferson National Monument Advisor portfolios.

Fusion/Fusion Prime Portfolios
Weekly returns YTD - June returns
Fusion Growth 1.05% 8.68%
Fusion Aggressive 1.04% 9.98%
Fusion Balanced 0.89% 7.08%
Fusion Moderate 0.63% 6.51%
Fusion Conservative 0.44% 4.92%

  Underlying Allocations (Jefferson National)
   
Allocations PDF




Nationwide marketFLEX Fusion/Fusion Prime Portfolios


This past week’s performance ranged from 0.06% to -0.74% from the more conservative to the more aggressive portfolio allocations. The conservative portfolio allocations benefited from larger allocations to government bonds and 2X NASDAQ 100 funds. The more aggressive portfolios were negatively impacted by larger allocations to gold and Russell 2000 funds. There has been a difference in performance recently between the Russell 2000 and the NASDAQ 100, which is a bit unusual given that the NASDAQ 100 and the Russell 2000 tend to trend in the same direction.

Volatility continues to hover near a multi-year low. In this low volatility investment environment, Fusion is likely to select enhanced beta funds in order to achieve the targeted return and risk at each risk profile level. Monthly adjustments are made to asset class and strategy allocations within each Fusion portfolio. In addition, the individual strategies within each portfolio may make position changes at any time.

Below is a link to the Fusion allocations for the Fusion Nationwide MarketFLEX portfolios.

Fusion/Fusion Prime Portfolios
Weekly returns YTD - June returns
Fusion Conservative 0.06% -1.04%
Fusion Moderate -0.05% 0.43%
Fusion Balanced -0.42% 1.02%
Fusion Growth -0.68% 0.88%
Fusion Aggressive -0.74% 3.65%

  Underlying Allocations (Nationwide)
   
Allocations PDF


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
Dynamic Fund Profiles
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures


 
  July 28, 2014      
Top of page
  Select Alternatives

Select Alternatives returned 0.15% for the week. The strategy was helped the most by its 38% weight in the AQR Risk Parity Fund (+0.67%). A large portion of the returns were offset by poor returns in real estate equities.

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
Dynamic Fund Profiles
Faith Focused Investing
Fusion
Lifetime Evolution
Market Leaders
Other Custodians
Select Alternatives
Strategic Solutions


Disclosures



 
  July 28, 2014      
Top of page
  Strategic Solutions

Last week the broad global market sectors were very mixed. Defensive and offensive market sectors were found at both the top and the bottom of the performance rankings this past week. Therefore, it is interesting to see that the leading strategies last week were Self-adjusting Trend Following (1.18%), Tactical Emerging Markets (1.03%), Fusion Prime 28 (0.80%), and Fusion Prime 22 (0.79%). The lagging strategies were Systematic Long/Short Bond Trading (-1.00%) and Managed Income Aggressive (-1.79%). This range of performance from various strategies and asset classes is among the many reasons Flexible Plan stresses the importance of strategic diversification in conjunction with active investment management.

  Weekly returns
Self-adjusting Trend Following 1.18%
TACTICAL EMERGING MARKETS 1.03%
FUSION PRIME 28 0.80%
FUSION PRIME 22 0.79%


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.


INDEX DISCLOSURE  

This presentation is provided for information purposes only and should not be used or construed as an indicator of future performance, an offer to sell, a solicitation of an offer to buy, or a recommendation for any security. Flexible Plan Investments, Ltd. cannot guarantee the suitability or potential value of any particular index.

These results do NOT represent actual trading or client experience, and do not reflect the impact of decision making or economic or market factors experienced during actual management of funds. The actual return may be lower or higher than the performance quoted. Annual returns are compounded monthly. Performance between selected dates may be misleading as indicative of overall performance of an index.

The Fusion Indexes are provided by Flexible Plan Investments Ltd. (“FPI”) and calculated by the NYSE Group, Inc. The inception date of the Fusion Indexes is 1/1/1998. The Self Adjusting Trend Following (STF) Index is provided by Flexible Plan Investments Ltd. (“FPI”) and maintained currently at Morningstar. The inception date of the STF Index is 1/1/1998. The indexes are rules-based and are an illustration of mathematical principles embodied in the Fusion arithmetical formula that is applied to derive the index results. It does not predict or project the performance of an investment or investment strategy as one cannot invest directly in an index.

While FPI’s Fusion strategies are based on the Fusion Indexes, and the FPI STF strategy is based on the STF Index, the indexes reflect the theoretical performance an investor would have obtained had it invested in the manner shown and does not represent returns an investor actually attained, as investors cannot invest directly in an index. No representation is being made that any client will or is likely to achieve results similar to those presented herein.

Fusion is predicated on combining multiple, dynamically risk-managed strategies into a single portfolio which is designed to add an extra level of risk-reduction and return to navigate diverse market environments, black swans, and uncertainty. It considers three different factors in a proprietary (post-Modern Portfolio Theory) methodology consistently applied over the period shown to generate trading strategy exposure: 1) momentum or relative strength of each strategy; 2) volatility or risk of each strategy; and 3) correlation of each strategy to other strategies in a portfolio context.

The Fusion Indexes are constructed illustrating the historical allocated performance from various sources, including actual returns of FPI’s model account strategies, ETFs and open-end mutual funds (including long/short and/or leveraged funds). From January 1998 to December 2013, Fusion Index performance was calculated by FPI. Index calculations from January 2014 forward were performed by the NYSE Group, Inc. From January 1998 to December 2013, there have been no assets managed under the Index rules at FPI. The Fusion mathematical algorithm has been in use by FPI since February, 2013. FPI reserves the right to make enhancements to the Index methodology.

The Fusion Indexes and the STF Index contain no management or advisory fees, other than the internal fees and expenses reflected in the NAV of the mutual funds or ETFs used. A client account in a FPI offered Fusion strategy will incur advisory fees; additional fees may apply including transactions and trading costs determined by the Custodian of the account. These fees and costs will decrease the return experienced by a client. Individual client account results will vary from the Fusion Index returns. Current and prospective clients should not assume that future performance will be the same or profitable. Distributions have been reinvested. When provided, dividends are reinvested for indexes. In those cases where indexes do not provide dividend information, those returns would be understated. As individual tax rates vary, taxes have not been considered.

The FPI FusionSM Indexes (the “Indexes”) are calculated by NYSE Group, Inc. or its affiliates (“NYSE Group, Inc.”). The FPI Fusion Index strategies or managed accounts, which are based on the Indexes, are not issued, sponsored, endorsed, sold or promoted by NYSE Group, Inc., and NYSE Group, Inc. makes no representation regarding the advisability of investing in such product.

NYSE GROUP, INC. MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND HEREBY EX¬PRESSLY DISCLAIMS ALL WARRANTIES OF MER¬CHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE FPI FUSION SM/® INDEXES OR ANY DATA INCLUDED THEREIN. IN NO EVENT SHALL NYSE GROUP, INC. HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

PAST RESULTS DO NOT GUARANTEE FUTURE RESULTS. Please read Flexible Plan Investments' Brochure Form ADV Part 2A carefully before investing. INVESTORS CANNOT INVEST DIRECTLY IN AN INDEX. THESE RESULTS DO NOT REPRESENT ACTUAL TRADING OR CLIENT EXPERIENCE.