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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
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.


 
  September 15, 2014        
  In my opinion
by Jerry Wagner

Is profiting in the stock market based on illusions?

And 3 questions to ask to not be fooled

When I was a child, I was fascinated with magic and magicians. I read scores of books, learned loads of tricks, and put on magic shows (ten-cent admission) in our basement. My favorite part was the illusions (I once worked a part of a summer vacation mastering a very convincing floating wand).

Houdini was the mentor we had in those pre-David Copperfield days. He had walked through walls, escaped everything, performed death-defying stunts, and even made a live elephant disappear from a London stage!

This weekend I watched a fascinating bio-flick on the History Channel on Houdini’s life, starring Adrien Brody. One of the best parts of the picture was Houdini’s war on spiritualists.

In one dramatic scene, the magician is confronted by a spiritualist who accuses him of being as much a fake as the mediums that he sought to expose. His reply was that he had always said his tricks were just that and he was an entertainer, while the spiritualists made out that they were real and their customers often relied on their “information.”

To learn more about the History Channel presentation or even watch it, go here.

As I consider the financial services industry, I wonder whether investors think of advisors as mediums rather than being masters of illusions. I sense that most think it is the former rather than the latter. How many times do you hear someone talking about an advisor as if he or she is infallible? Or listen to someone explaining a strategy or stock pick like it just can’t lose? Isn’t that the medium’s game? The spirit world has to be right, doesn’t it? Investors often want that certainty as well.

At the same time, investors don’t want to believe their investments are built on illusions. There’s a negative connotation to the word. As Houdini said, they are based on a “trick.” You see one thing while something else is really happening. That doesn’t inspire confidence, does it?

Yet on closer inquiry, both of these viewpoints are askew. While we look for the infallible expert and the perfect strategy, we know that such does not exist – at least in this world. And although illusions can be said to be based on “tricks,” in reality they are based on a well thought out understanding of human behavior and the physics underlying the illusion’s success.

A grand illusion (like making the elephant disappear or walking through walls) can take many years to develop. The illusion is based on the application of human ingenuity, not simple awe of an “expert’s” opinion. And while most everyone who watches an illusion marvels in amazement, there are always those who can divorce themselves from the normal behavioral tendencies and focus on what is really happening – figuring out the methods. However, this failure to convince the minority does not negate the awe experienced by the majority.

Many times in this column I’ve pointed out the problems in relying on “expert” analysis. Study after study shows that experts are wrong more often than not when it comes to predicting future events. Yet we see these financial spiritualists performing their act daily on the various financial channels.

Meanwhile, I have been a proponent of quantitative-based strategies. These investment approaches are based not on opinion but rather years of study and solid mathematics. They are founded on statistical measures of human behavior. And while they are not always right, the research underlying them shows that they lead to success most of the time.
Financial “experts” seem to be closer to the mediums of old, while quantitative analysts follow methods similar to the creators of illusions. Realizing that they both can be wrong and that each has the potential to mislead, which approach seems best to you in managing your money?

If you choose the illusionist’s methods, how do you know that the strategy results you are being shown are not “illusions”? Studies tell us that if one has to make predictions about the future, there are two things we can do to increase our chances that we are successful. According to Nobel Prize winner, Daniel Kahneman’s, “Thinking Fast and Slow,” this can be done by 1) following a rules-based approach and 2) looking to predict only a very short time into the future.

Of course, the first requirement is exactly what quantitative investing is all about. It tries to reduce investing to a set of rules that have proven successful in the past. Now, it is important to note here that by “successful” we don’t mean every trade is a profitable one or even that every day, week, month, or quarter of trading is going to be profitable. It only means that past research demonstrates that applying the methodology through past market cycles consisting of both bull and bear markets has a better than 50% probability of yielding profits.

The second requirement makes sense too, doesn’t it? We know that trying to predict the weather an hour from now is easier than predicting it next year at this time. Isn’t it foolish that around the beginning of each year we see these predictions of how the markets are going to have behaved by year’s end? Yet the pattern is repeated yearly. It’s not enough to try to predict company earnings next quarter; Wall Street routinely attempts to predict 2015 and 2016 as well.

Most quantitative models focus instead on shorter periods. They trade day by day or week by week or month by month. This makes the methodology more responsive to what is actually occurring and allows for quicker recognition if things are going wrong so that corrective action can be taken. If you are trying to look out a year into the future, you don’t know whether you are right or wrong until you are near the end of that year. Until then it’s easy to say about a losing position, “Oh, we have plenty of time. It will come back.”

So if you want to avoid falling for illusions, while taking advantage of the ingenuity of their creators, ask a couple of questions when you hear about good financial results:

  1. Are they founded on a rules-based approach or, instead, the cumulative results of an investment committee or other human experts?
  2. Have the rules been consistently applied over a very long time period that encompasses bull, bear, and sideways markets; and
  3. How often does it trade? Is it often enough to be responsive to the market being traded and to tell if the underlying assumptions were right or wrong?

Simple questions, but they will help you put the odds of success on your side in choosing among investment strategies. The results of quantitative strategies need not be illusions, nor should you follow the spiritual guidance of a financial medium.

Turning to last week’s markets, stocks were negative across the board. Both here and abroad the arrows were pointing down last week and month to date. At the same time, quarter-to-date numbers were mixed but mostly positive in this country. Stocks of larger companies continue to do well, while small and even mid-cap stocks have suffered.

The Dollar’s continued rise is largely responsible for domestically-based companies continuing to outperform their internationally-based brethren. It also is the reason why commodities continue to plunge. While gold has been the best of the commodities, it, too, has moved to an oversold condition that is the exact opposite of the Dollar’s overbought condition.


Source: Bespoke Investment Group

I believe both are the result of the big move higher in interest rates of late. Investors continue to anticipate an increase in rates by the Federal Reserve. While most experts are suggesting next spring or summer, what’s important is that the markets are acting like it is right around the corner.


Source: Bespoke Investment Group

Since our interest rates are already higher than most developed countries, funds are flowing into the US and our Dollar is moving higher, and commodity prices, which mostly come from overseas, are falling. And the discussion of all this creates the uncertainty that underlies most stock market declines.

Last week more economic reports beat expert prognosticators than disappointed. But this was largely ignored in the face of rising interest rates. While bullish sentiment plunged, it has not yet reached the level that seems to spur rallies.


Source: Bespoke Investment Group

And, of course, as we have been reporting, our Political/Seasonality Index has been in negative territory since September 9th. It doesn’t turn positive for any appreciable time until October 9th (it does move back into stocks for the next couple of days though).

PSI Chart

Houdini’s war on spiritualists continued until the day he died here in Detroit and was carried on by his wife, Bess, for the remaining seventeen years of her life. Many thought that Houdini hated the spiritualists that he was always able to expose. In truth, he revealed to his intimates that he yearned to find the real deal.

Isn’t that what drives all of us? But just as there really is no magic bullet, there is no expert that is always right or strategy that only goes up and never goes down.

In real life we learn, instead, to put the probabilities on our side. If you do that consistently or employ methodologies that do so, experience tells us that while we won’t always be right, we will be right more often than not, and success will not be merely an illusion.

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


Disclosures
 
  September 15, 2014      
Top of page
  What's happening at Flexible Plan

Flexible Plan reveals new website

Watch for this week’s release of the flexibleplan.com public website, complete with a new look and feel, with improved functionality. A release for Phase 2 of the FPI site, which includes after-login features and broker applications, is planned for 2015.


Revised: New Guidelines for Flexible Plan’s Pioneering Small Accounts Program which continues at Trust Company of America and Schwab Institutional

GREAT NEWS! Transfers will again be accepted on qualified accounts that are accompanied with a statement dated within 30 days.

In addition, effective August 25, 2014, demonstrating our commitment to improving our small accounts program so that the revolutionary program can continue to flourish, the following procedures are followed for new accounts under $25,000:

  • Non-Qualified accounts – only checks will be accepted to fund an account under $25,000. Please request a check from the current custodian (payable to the successor custodian).
  • Flexible Plan reserves the right to return accounts with a transfer that results in an account under $5,000.
  • Flexible Plan will no longer monitor funding for Small Accounts; therefore, if the account has not funded after 60 days, the client will receive a non-management letter.
  • Systematic withdrawals will not be accepted on accounts under $25,000.
  • Small Account Set-Up fees still apply – 3% of the estimated investment amount, up to a maximum of $350.
  • Small Account balance minimums will be screened on a monthly basis. Accounts reduced below $5,000 due to client withdrawals will receive a termination notice.

To accommodate new account paperwork for Small Accounts currently in the processing queue, a short grace period will be granted.

After today (September 15th), if a transfer form is received on a non-qualified account, the advisor will be notified by email to request a check from the current custodian.

The Small Account program at Flexible Plan was created on April 1, 2009 to allow for accommodation of small accounts for clients and family members and was designed to bring managed accounts to a new group of clients that previously had not had access to professional management. In our first five years of operations we have learned much from the experience – both advantages and pitfalls. The new procedures are designed to continue the program while making sure that the delivery of such services is cost effective.


New P.O. Box to Expedite Check Processing at TCA

Trust Company of America (TCA) has a new Post Office Box designated specifically for checks related to client account contributions and checks from transferring custodians.

The new Post Office Box is:
P.O. Box 5158
Englewood, CO. 80155-5158

This specific P.O. Box enables timelier posting of funds to client accounts and your ability to invest faster. The Transfer Request form has been updated to reflect this new P.O. Box and is available online.



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


 
  September 15, 2014      
Top of page
  Last week in the market

Investors wait, wonder what FED will say

Bulls took a breather last week, mulling whether recent economic indicators might lead the Federal Reserve to issue a slightly more hawkish policy statement this Wednesday. Across five trading days, the S&P 500 retreated 1.10% to 1,985.54, the NASDAQ 0.33% to 4,567.60 and the Dow 0.87% to 16,987.51.3

% Change Y-T-D 1-Yr Chg 5-Yr Avg 10-Yr Avg
DJIA
+2.48
+11.02
+15.37

+6.47

NASDAQ
+9.36
+22.92
+23.90
+13.91
S&P 500
+7.42
+17.95
+18.08
+7.64
Real Yield 8/15 Rate 1-Yr Ago 5-Yrs Ago 10-Yrs Ago
10Yr TIPS Yd
0.49%
0.81%
1.59%
1.81%

  YTD-August returns
DJIA
3.15%
NASDAQ
9.67%
S&P 500
8.39%

Sources: online.wsj.com, bigcharts.com, treasury.gov - 9/12/14 4,5,6,7
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.



Summer spending spree lifts retail sales

They increased 0.6% in August, easing some anxieties about a possible slowdown in personal spending. Core retail sales (which exclude auto, gas, food, and home improvement purchases and more closely match the consumer spending aspect of GDP) improved 0.4% last month, and were up 4.1% year-over-year. The Commerce Department also revised July’s headline retail sales gain up to 0.3%.1



Consumer sentiment hits a 14-month peak

At a reading of 84.6, September’s preliminary Thomson Reuters/University of Michigan consumer sentiment index was 2.1 points above its final mark for August. Not only that, it advanced to its highest level since July 2013. Household income expectations also hit their highest level in almost six years.1



Gold descends again, oil slumps on IEA forecast

Settling Friday at $1,231.50, the precious metal fell 2.8% last week on the COMEX, undercut by dollar strength. Silver posted the same weekly loss, ending the week at $18.55. After the International Energy Agency reduced its 2015 world demand forecast for oil, NYMEX crude slipped 0.6% Friday to settle at $92.27.2



Citations

1 - reuters.com/article/2014/09/12/usa-economy-retail-idUSL1N0RD0OS20140912 [9/12/14]
2 - proactiveinvestors.com/companies/news/56782/gold-logs-5-day-slump-wti-drops-06-at-9227--56782.html [9/12/14]
3 - markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [9/12/14]
4 - markets.wsj.com/us [9/12/14]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F12%2F13&x=0&y=0 [9/12/14]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F12%2F13&x=0&y=0 [9/12/14]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F12%2F13&x=0&y=0 [9/12/14]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F11%2F09&x=0&y=0 [9/12/14]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F11%2F09&x=0&y=0 [9/12/14]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F11%2F09&x=0&y=0 [9/12/14]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F13%2F04&x=0&y=0 [9/12/14]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F13%2F04&x=0&y=0 [9/12/14]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F13%2F04&x=0&y=0 [9/12/14]
6 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/12/14]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/12/14]


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



 
  September 15, 2014      
Top of page
  Gold

Apollo 11 … launch cancelled for now

Several weeks ago we looked at the weekly chart for gold prices and spotted an inverse head & shoulders pattern, which turned into a “Pennant” formation (blue lines).
formation


Source: 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.                                                                        

Having failed to break the upper resistance line, it has now turned and renewed the downward trend by breaking the lower Pennant resistance line. It now looks like prices will go down and test the major support line, which has been holding at the gold production price level (purple line).

  Hedged Gold Bullion
Top of page

Hedged Gold Bullion dropped 0.98% last week. The 65% allocation in The Gold Bullion Strategy Fund (QGLDX, -2.97%) was responsible for the losses. The 25% hedging position in the ProFunds-Short Precious Metal Fund (SPPSX) was on almost all through last week except last Tuesday (09/09/14) and offset the losses by 1.00%.

  TVA Gold
Top of page

TVA Gold was down 2.66% last week, while The Gold Bullion Strategy Fund (QGLDX) was down 2.97% for the same period as the Dollar enjoyed another strong week from expectations of Fed policy tightening. The strategy began the week 100% long on Monday, moving to 80% long at Monday’s close as market volatility rose above our targeted level.

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 last week, the gold spot price declined 3.09% as the US Dollar strengthened. The Gold Bullion Strategy Fund (QGLDX) lost 2.97% 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 lower, on average, over last week, while the COMEX gold futures contracts dropped 2.83%.

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



 
  September 15, 2014      
Top of page
  Quantified Funds

US equity markets were down last week. The NASDAQ Composite lost 0.33%, the S&P 500 was down 1.10%, and the Dow Jones Industrial Average recorded a weekly loss of 0.87%. Nine of the ten S&P industrial sectors were down for the week. The move downward was led by Energy (-3.73%), Utilities (-3.25%), Telecommunications (-2.64%), and Materials (-1.89%). All of the Quantified Funds were down last week. The largest drop was in the Quantified Market Leaders Fund (QMLFX, -4.31%), followed by the Quantified All-Cap Equity Fund (QACFX, -2.04%), the Quantified Alternative Investment Fund (QALTX, -1.27%), and finally the Quantified Managed Bond Fund (QBDSX), which was down 0.79%.

The Quantified All-Cap Equity Fund (QACFX) made some changes last week, shifting its weightings in four leading stock baskets, which were over 50% of the portfolio’s composition: “All-Cap Quality Acceleration” (23%), “All-Cap Piotroski” (16%), “All-Cap Cash Flow” (9%), and “CMPS- Double 10 Dividend and Growth” (7%). Among domestic sector distributions, Information Technology and Industrials led with portfolio allocations of 16% and 13%, respectively. The largest stock holdings in the All-Cap portfolio were in the common stock of Associated Estates Realty Corp. (AEC, 2.16%) and the common stock of AAR Corp. (AIR, 2.09%).

The cash level within the All-Cap Fund decreased to 10% last week. The Fund’s daily pattern trading of S&P 500 futures started the week neutral and changed to 6% long on Tuesday’s close to begin this week. Our TVA-based futures hedge remained 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 on Friday: Emerging Markets (19.2%), Large-Cap Growth (4.8%), Large-Cap Value (14.4%), and Mid-Cap Value (9.6%).

Total sector ETF weightings remained at 52% last week. Distribution of sector holdings and weights were as follows: Electronics (12.09%), Real Estate (13%), Energy Services (13.91%), and Technology (13%).The individual ETF positions with the leading portfolio weightings were in the iShares Dow Jones Technology ETF (IYW, 7.5%), the Ultra Dow 30 ProShares ETF (DDM, 7.1%), the Direxion Emerging Markets Bull 3x ETF (EDC, 7.0%), and the SPDR S&P Oil & Gas Exploration & Production ETF (XOP, 5.1%).

Within the Quantified Alternative Investment Fund (QALTX), the Long/Short Market Neutral Alternative sub-portfolio increased weighting in the Madison Covered Call and Equity Income Fund (MENAX) from 0% to 3% and decreased weighting in the Dreyfus Global Alpha Fund (AVGRX) from 1.33% to 1.27%.

Among the largest ETF positions there were a few changes: allocations to the Wisdom Tree Managed Futures Strategy ETF (WDTI, 3.76%), the First Trust North American Energy Infrastructure ETF (EMLP, 4.6%), and the Materials Select SPDR ETF (XLB, 2.06%) increased, while allocation to the PowerShares Global Water ETF (PIO, 1.5%) decreased.

The cash level within the Fund increased to 15.86% last week. The daily pattern trading of S&P 500 Index futures with 10% fund capital allocation started the week neutral and changed to 3% long on Tuesday’s close to begin this week. The 7.5% capital allocation of the volatility-based systematic trading of NASDAQ 100 Index futures remained at 15% long throughout last week.

The Quantified Managed Bond Fund’s (QBDSX) two leading broad-bond index ETF holdings, the Peritus High Yield Bond ETF (HYLD, -0.92%) and the iShares S&P National Muni Bond ETF (MUB, -0.40%), were down for the week.

The 10-year US Treasury yield increased to 2.61% for the week. The Fund increased weightings in the Peritus High Yield Bond ETF (HYLD) from 9% to 12.3% and in the iShares S&P National Muni Bond ETF (MUB) from 7.3% to 10.7%, while decreasing allocation in the SPDR Barclay’s Capital High Yield Bond ETF (JNK) from 9% to 6% and in the iShares Barclays 7-10 Year Treasury Bond ETF (IEF) from 5.8% to 4.8%. Cash increased to 4.2%.

The 10% active portfolio exposure to 30-Year US Treasury Bond futures in the Fund started the week long, changed to short on Tuesday’s close, long on Wednesday’s close, and short on Thursday’s close to begin this week. The position gained around 2.54%.

Fund (Inception) Symbol Qtr Ending 6/30/14 YTD Ending 8/31/14 1 Year Ending 8/31/14 Since Inception Ending (8/31/14)* Annual Expense Ratio
The Gold Bullion Strategy Fund (7/5/13) QGLDX 2.71% 5.98% (8.90%) 2.39% 1.66%
Quantified Managed Bond Fund (8/9/13) QBDSX 1.68% 3.94% 4.61% 3.58% 1.68%
Quantified All-Cap Equity Fund (8/9/13) QACFX 0.99% 0.29% 10.85% 4.71% 1.51%
Quantified Market Leaders Fund (8/9/13) QMLFX 4.62% 7.52% 18.74% 13.55% 1.71%
Quantified Alternative Investment Fund (8/9/13) QALTX 2.34% 3.58% 16.16% 11.54% 2.20%

*Annualized

As of the most recent prospectus, the expense ratios for the Gold Bullion Strategy Fund are as follows: Investors’ Class (No Load), 1.66%; Class A, 1.66%; Class C, 2.41%. The maximum sales charge imposed on Class A share purchases (as percentage of offering price) is 5.75%. An additional 2% redemption fee applies to all share classes, including Investors’ Class, when shares are redeemed within 7 days of purchase.

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



 
  September 15, 2014      
Top of page
  Diversified Bonds

Diversified Bonds fell 0.23% last week, as three of its seven portfolio components gained. Managed Income Aggressive, Systematic Long/Short Bond Trading, and Government Bond Trading took advantage of the melt-up in 30-year US Treasury Bond yields by being inverse (short) that market on key days during the week, particularly on Friday.

Strategy Weekly returns YTD-August returns Allocation
Diversified Bond Portfolio -0.23% 1.10%  
Government Bond Trading* 1.25% 1.08% 12%
Strategic High Yield Bond -0.67% 1.31% 21%
Systematic Long/Short Bond Trading 1.39% -17.37% 6%
Global Maturities -0.72% 3.95% 21%
Managed Income -0.66% 3.77% 21%
Managed Income Aggressive 1.51% 4.68% 5%
Managed Income - 100% SAF -0.84% 2.21% 14%

*Start date March 11, 2014

  Strategic High Yield Bond
Top of page

Strategic High Yield Bond fell 0.67% last week and remained 100% invested in the high-yield bond market.

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



 
  September 15, 2014      
Top of page
  Diversified Tactical Equity

Diversified Tactical Equity fell 0.97% last week, as only S&P Tactical Patterns posted a gain among its ten component strategies.

Strategy Weekly returns YTD-August returns Allocation
Diversified Tactical Equity -0.97% 4.58%  
Classic -0.63% 2.76% 7%
Contrarian S&P Trading -0.05% 2.49% 11%
Gold Equities Trading -1.59% -0.05% 12%
Market Leaders Dynamic Aggressive -2.70% 4.97% 10%
Political Seasonality Index -0.05% 5.61% 6%
S&P Tactical Patterns 0.54% -5.12% 12%
Self-adjusting Trend Following -1.06% 15.33% 11%
Systematic Advantage -1.31% 8.97% 10%
Third Day Tactical Blend -1.40% -1.29% 12%
Volatility Adjusted NASDAQ -1.05% 14.85% 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 0.63% last week, as only one of its four positions gained – its small-cap growth holding. Classic’s DAAP implementation continued to be defensive, with its equity exposure at 20%. All other Classic accounts remain fully invested.

  Political and Seasonal Tendencies
Top of page

Political Seasonality Index remained in cash last week.

PSI Chart

  S&P Tactical Patterns
Top of page

S&P Tactical Patterns gained 0.54% last week. The strategy had a 200% short exposure to the S&P 500 Index only for last Monday (09/08/14), and a 100% money market position (a neutral position) to the market last Tuesday (09/09/14), then switched to a 60% net long exposure to the S&P Index for the rest of last week into this 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 could not hold the 4,100 mark, but intraday it did spend some time there. The market spent the week within a 1% range, and closed down for the first time in six weeks with a loss of 0.51%. At 2X, STF’s loss was around 1%. Even at 2X the loss in the strategy was less than that of the broad market S&P 500.

A couple of NASDAQ 100 stocks were among last week's equity winners—Yahoo! closed up 8.3% and Liberty Global (a media company) advanced 5%. Apple's announcement of two new phones, a watch, and electronic payment system saw the stock initially pop, then immediately drop. Eliminating the four-hour period around the event, the stock basically climbed uninterrupted from $99 to $102 this past week. Apple alone helped limit the losses in the NASDAQ 100 this past week.

Nothing much has changed within STF, and the trend still looks clear and strong, so continue to expect a 2X position this week.


SELF-ADJUSTING TREND FOLLOWING (STF) INDEX

Last week the STF Index advanced 1.24%. The Index tested its all-time high during the week, but it did not set a new high. Due to the processing of data and the compilation process the NYSE goes through in computing this Index, there is a one-day lag in reporting. This means that the Index that was reported Friday was actually as of Thursday’s close. For the week ending 9/11, the NASDAQ 100 Index was up 0.60%. STF remains fully invested in 2X NASDAQ 100 positions.

The Index is calculated by the NYSE using the same rule set and tradable securities that are used in our STF managed account service. The Index is designed to track the STF portfolio management strategy offered by Flexible Plan Investments and does not represent any particular account or custodian. It is important to note that an index does not include management fees in its calculation. Despite any differences between the Index and managed accounts, the Index may be used as an indicator of how STF is likely performing.

  CNBC Yahoo! Bloomberg Morningstar Direct Intuit Quicken
Self-adjusting Trend Following FPSTF ^FPSTF FPSTF FPSTF FPSTF

 

 
  Third Day Tactical
Top of page

Third Day Tactical Blend fell 1.40% and Third Day Tactical Blend Balanced fell 1.17% last week. The model signaled a long position for every day except Thursday last week, but only gained ground on Wednesday. We moved to cash at Friday’s close.


Weekly returns YTD-August returns
Third Day Tactical Blend Balanced -1.17% -1.39%
Third Day Tactical Blend -1.40% -1.29%
  Volatility Adjusted NASDAQ
Top of page

Volatility Adjusted NASDAQ was down 1.05% for the week, while the NASDAQ 100 was down 0.51% for the same period. VAN remained 2X long for the week as market volatility remained below our targeted level, despite concerns over potential Fed tightening.

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



 
  September 15, 2014      
Top of page
  Dynamic Fund Profiles

All of the DFP suitability profiles continued the re-sampled efficiency portfolio allocations since earlier in August. Over last week, all DFP profiles moved lower as the five sub-advised component mutual funds declined in value last week, led by The Gold Bullion Strategy Fund (QGLDX, -2.97%) and the Quantified Market Leaders Fund (QMLFX, -4.31%).

Dynamic Fund Profiles (DFP) Allocation August – Nov 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 11.47% 22.05% 28.77% 28.10% 9.61%
DFP Moderate 19.97% 22.62% 24.09% 23.72% 9.60%
DFP Balanced 23.31% 24.18% 17.60% 25.30% 9.61%
DFP Growth 26.17% 25.91% 11.20% 27.09% 9.63%
DFP Aggressive 28.48% 27.68% 5.48% 28.72% 9.64%

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

 

Weekly Return
(9/8-9/12/2014)

YTD-August returns
Dynamic Fund Profiles Conservative -1.87% 3.51%
Dynamic Fund Profiles Moderate --2.14% 3.22%
Dynamic Fund Profiles Balanced --2.30% 2.89%
Dynamic Fund Profiles Growth --2.43% 2.66%
Dynamic Fund Profiles Aggressive --2.55% 2.68%

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



 
  September 15, 2014      
Top of page
  Faith Focused Investing

The Faith Focused Investing portfolios ended the week down. All but one position lost value during the week. 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-August returns
Faith Focused Investing Moderate -1.21% 2.16%
Faith Focused Investing Conservative -1.21% 1.94%
Faith Focused Investing Aggressive -1.22% 2.69%
Faith Focused Investing Growth -1.22% 2.44%
Faith Focused Investing Balanced -1.22% 2.34%

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



 
  September 15, 2014      
Top of page
  Fusion

Last week portfolio performance ranged from -1.35% for the most conservative risk profile to -4.17% for the most aggressive risk profile. This range of performance illustrates the diversity of strategies deployed in Fusion. Portfolios are quite varied in their respective allocations to stocks, bonds, gold, leverage, and inverse position alignment with each client’s risk profile. Every week portfolio allocations change. The more conservative portfolio allocations benefited from a fairly large position in a 2X US Dollar fund, which was up, and a position in our Political Seasonality Index strategy that was little changed. The portfolio was negatively impacted by modest exposure to 2X emerging market and 2X NASDAQ 100 funds. The more aggressive portfolio allocations were hurt by larger exposure to both 2X emerging market and other leveraged equity funds, all of which have performed well in recent weeks.

Fusion first targets the risk level suitable for each client and then crafts the portfolio allocations in an effort to maximize return opportunities, seeking to maximize risk-adjusted returns.

Adjustments are made to 50% of the asset class and strategy allocations within the Fusion portfolios 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 within each portfolio may make position changes at any time.

Fusion portfolios Weekly returns YTD-August returns
Fusion Conservative -1.83% -0.60%
Fusion Moderate -2.74% 1.50%
Fusion Enhanced Income -2.96% 1.92%
Fusion Balanced -3.55% 3.34%
Fusion Growth -3.94% 4.10%
Fusion Aggressive -4.17% 5.03%


FUSION INDEXES

Last week all of the Fusion Indexes declined along with the global stock, bond, and precious metals markets. However, the Fusion Moderate and Fusion Conservative Indexes did reach a new all-time high on Monday before declining for the week. The performance of the Indexes closely followed the risk profiles they were designed for. From the most aggressive to the most conservative, the performance for the week was: Aggressive (-2.09%), Growth (-2.30%), Balanced (-1.92%), Enhanced Income (-1.48%), Moderate (-1.30%), and Conservative (-0.74%). The more aggressive allocations have larger and more concentrated exposure to leveraged equity funds. The more conservative allocations have broader diversification and less exposure to leveraged equity funds, both of which help temper volatility.

Listed below are the Fusion Indexes as calculated by the NYSE. These Indexes are designed to track the primary Fusion risk profiles that Flexible Plan implements on behalf of clients. It is important to understand that all of these Indexes are based on the same Fusion methodology used in managed client accounts; however, they do not represent any particular account or custodian. The Indexes may also have a different rebalancing periodicity from when the Fusion portfolios make changes to their respective allocations at the various custodians where Fusion is implemented. 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


Due to the processing of data and the compilation process the NYSE goes through in computing this index, there is a one-day lag in reporting. This is because we report to the NYSE the Fusion positions, then the NYSE computes the performance, and then publishes the results. When all of that is completed, the Index results are published. This is typically delayed one trading day.

Several primary quote services make these Indexes widely available, and each service publishes the current and historical data on different schedules. The following is the current list of services and the corresponding symbol for each of the Fusion Indexes:

Fusion Index CNBC Yahoo! Bloomberg Morningstar Direct FastTrack
Flexible Plan Aggressive Fusion Index FPFA ^FPFA FPFA FPFA FPFA-
Flexible Plan Balanced Fusion Index FPFB ^FPFB FPFB FPFB FPFB-
Flexible Plan Conservative Fusion Index FPFC ^FPFC FPFC FPFC FPFC-
Flexible Plan Enhanced Income Fusion Index FPFE ^FPFE FPFE FPFE FPFE-
Flexible Plan Growth Fusion
Index
FPFG ^FPFG FPFG FPFG FPFG-
Flexible Plan Moderate Fusion Index FPFM ^FPFM FPFM FPFM 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



 
  September 15, 2014      
Top of page
  Lifetime Evolution

All Lifetime Evolution portfolios ended down for the second consecutive week. Real estate and emerging market positions took the biggest hits, down over 3.5% for 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-August returns
Lifetime Evolution Conservative -1.30% 1.47%
Lifetime Evolution Moderate -1.54% 1.05%
Lifetime Evolution Balanced -1.62% 0.84%
Lifetime Evolution Growth -1.70% 0.72%
Lifetime Evolution Aggressive -1.81% 0.49%

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



 
  September 15, 2014      
Top of page
  Market Leaders

Week after week of gains could not go on forever—and it didn’t. After five consecutive weeks of gains, the market took a breather. Investors took good economic news, strong August retail sales, and higher consumer sentiment numbers as bad news. The fear is that good news will be bad news with a strengthening economy forcing the Federal Reserve to raise rates sooner rather than later.

The good news was that the S&P 500 Index only fell 1.1% for the week, but the rest of the world fared much worse: Emerging Markets took the largest drop of 4.5% and Developed Countries fell 1.5%. With falling equities you might have expected a flight to safety and therefore a bounce higher in bonds. That was not the case, however, with the Aggregate Bond Index falling 0.7% last week. In this new world, good economic news is pushing bond yields higher (bond prices lower) and also sending equities lower from the fear of higher rates. Overall, it was hard to find any asset class or sector that showed any positive return last week.

Rank
  Asset Class % change (9/8-9/12/14)  
#1   Mid-Cap Value (Tactical) -1.6%  
#1   Emerging Markets (Strategic & Tactical) -4.5%  
#2   Large Value (all Market Leaders) -1.1%  
#3   Mid-Cap Growth (Tactical) -1.1%  
#3   Mid-Cap Value (Strategic & Dynamic) -1.6%  
#4   Large Growth (all Market Leaders) -0.9%  
    S&P 500 Index -1.1%  
    All Country World Index -1.7%  
    Aggregate Bond Index -0.7%  

SECTORS

  • Electronics, which had been one of the weekly leaders, gave back all of the previous week’s gains and slightly more, losing 1.8%.
  • Energy Services has had a series of big up weeks followed by large down weeks. Slowing global growth concerns continue to push oil prices to some of their lowest levels in months. This has put downward pressure on energy service-related stocks. Energy Services has now had two weeks of 3% losses, more than offsetting the gain of almost 3% three weeks ago.
  • Technology, the newest addition in August, had a relatively good week by posting a smaller decline than the overall market.
  • Fears of higher rates coming sooner than expected put severe pressure on real estate stocks. This sector is highly sensitive to interest rates over the short term.
Sector Leadership % change (9/8-9/12/14)
Electronics 1.4%
Technology 0.9%
Energy Services -3.1%
Real Estate 0.8%

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), Health Care (RYHAX), Energy Services (RYVAX), and Real Estate (RYREX)

Dynamic Weekly returns YTD-August returns
Market Leaders Dynamic Conservative -1.79% 6.40%
Market Leaders Dynamic Moderate -2.05% 6.20%
Market Leaders Dynamic Balanced -2.34% 5.86%
Market Leaders Dynamic Growth -2.59% 5.60%
Market Leaders Dynamic Aggressive -2.70% 4.97%
Strategic Weekly returns YTD-August returns
Market Leaders Strategic Conservative -2.22% -0.54%
Market Leaders Strategic Moderate -2.95% 0.54%
Market Leaders Strategic Balanced -3.07% 1.86%
Market Leaders Strategic Growth -3.22% 2.96%
Market Leaders Strategic Aggressive -3.31% 3.79%
Tactical Weekly returns YTD-August returns
Market Leaders Tactical Conservative -1.96% 7.34%
Market Leaders Tactical Moderate -2.60% 6.67%
Market Leaders Tactical Aggressive -2.76% 4.87%
Market Leaders Tactical Growth -2.84% 5.45%
Market Leaders Tactical Balanced -2.90% 6.18%

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



 
  September 15, 2014      
Top of page
  Other Custodians

ETF

All ETF Market Leaders, Rotational No-Load, and Rotational No-Load SAF portfolios posted negative returns at Schwab last week. There was a perfect inverse correlation between portfolio risk and return within each strategy, with ETF Market Leaders ranging from -2.65% to -4.03%, Rotational No-Load SAF ranging from -1.74% to -3.39%, and Rotational No-Load Non-SAF ranging from -1.20% to -2.99%.

The aggressive portion of ETF Market Leaders was hurt by a 35% weighting in the iShares MSCI Turkey Index Fund, which lost over 8% last week. The conservative portfolio fared slightly better due to its 50% weighting in the Quantified Managed Bond Fund, which suffered modest losses. The aggressive portfolios within both Rotational No-Load strategies were hurt by REIT-dedicated funds and the SAF-managed strategy was hurt especially by allocation to the Quantified Market Leaders Fund. The corresponding conservative portfolios held up better because of their large weightings in bond funds.

ETF Market Leaders portfolios
Weekly returns YTD-August returns
ETF Market Leaders Conservative -2.65% -1.83%
ETF Market Leaders Moderate -3.38% -2.00%
ETF Market Leaders Balanced -3.67% -2.46%
ETF Market Leaders Growth -3.84% -1.81%
ETF Market Leaders Aggressive -4.03% -0.64%

Rotational No-Load ETF portfolios
Weekly returns YTD-August returns
Rotational No-Load ETF Conservative -1.20% -0.21%
Rotational No-Load ETF Moderate -1.94% 0.06%
Rotational No-Load ETF Balanced -2.67% 0.84%
Rotational No-Load ETF Growth -2.86% 1.55%
Rotational No-Load ETF Aggressive -2.99% 2.35%

Rotational No-Load ETF/SAF portfolios
Weekly returns YTD-August returns
Rotational No-Load ETF/SAF Conservative -1.74% 0.81%
Rotational No-Load ETF/SAF Moderate -2.54% 0.84%
Rotational No-Load ETF/SAF Balanced -3.08% 1.64%
Rotational No-Load ETF/SAF Growth -3.25% 2.68%
Rotational No-Load ETF/SAF Aggressive -3.39% 3.65%


Other Custodian Quantified Fund-Based

Market Leaders Strategic portfolios
Weekly returns YTD-August returns
Market Leaders Strategic Conservative -2.50% 1.96%
Market Leaders Strategic Moderate -3.58% 1.46%
Market Leaders Strategic Balanced -4.01% 2.57%
Market Leaders Strategic Growth -4.19% 4.25%
Market Leaders Strategic Aggressive -4.36% 5.73%

Market Leaders Strategic/Alternative SAF portfolios
Weekly returns YTD-August returns
Market Leaders Strategic/Alternative SAF Conservative -2.25% 1.95%
Market Leaders Strategic/Alternative SAF Moderate -3.13% 1.55%
Market Leaders Strategic/Alternative SAF Balanced -3.47% 2.42%
Market Leaders Strategic/Alternative SAF Growth -3.61% 3.78%
Market Leaders Strategic/Alternative SAF Aggressive -3.75% 4.96%

Dynamic Fund Profiles portfolios
Weekly returns YTD-August returns
Dynamic Fund Profiles Conservative -1.87% 3.51%
Dynamic Fund Profiles Moderate -2.14% 3.22%
Dynamic Fund Profiles Balanced -2.30% 2.89%
Dynamic Fund Profiles Growth -2.43% 2.66%
Dynamic Fund Profiles Aggressive -2.55% 2.68%



Other Custodian Fusion/Fusion Prime Portfolios

Performance ranged from -2.57% for the more conservative risk profiles to -3.61% for the more aggressive risk profiles. Conservative portfolios benefited from broader diversification and a sizeable position in a 2X US Dollar fund, which was up for the week, and a large allocation to the Political Seasonality Index strategy that was little changed. Smaller allocations to leveraged emerging market and government bond funds hurt performance. The more aggressive portfolios were negatively impacted by allocations to leveraged equity funds, especially emerging markets, that were all lower on the week.

The portfolio allocations are very broad and distinctly different but the combined components of each portfolio delivered returns that were unusually close across the risk spectrum.

Fusion first targets the risk level suitable for each client and then crafts the portfolio allocations in an effort to maximize return opportunities, seeking to maximize risk-adjusted returns. Portfolios are reallocated approximately monthly. The individual strategies within each portfolio may make position changes at any time.

Fusion/Fusion Prime Portfolios
Weekly returns YTD-August returns
Fusion Conservative -2.57% 1.74%
Fusion Moderate -2.99% 3.08%
Fusion Aggressive -3.16% 7.54%
Fusion Growth -3.27% 5.23%
Fusion Balanced -3.61% 3.79%

  Underlying Allocations (Schwab)
   
Allocations PDF




Jefferson National Monument Advisors Fusion/Fusion Prime Portfolios


This past week portfolio performance ranged from -1.14% for the more conservative risk profiles to -1.45% for the more aggressive risk profiles. The conservative portfolios had exposure to 2X US Dollar and inverse international funds, which were up on the week. Smaller allocations to leveraged government bonds and emerging markets hurt performance. The aggressive portfolio allocations had fairly large positions in 2X S&P 500 and 2X NASDAQ 100 funds, which were down on the week.

The portfolio allocations are very broad and distinctly different but the combined components of each portfolio delivered returns that were unusually close across the risk spectrum.

Fusion first targets the risk level suitable for each client and then crafts the portfolio allocations in an effort to maximize return opportunities, seeking to maximize risk-adjusted returns. Portfolios are reallocated approximately monthly. 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-August returns
Fusion Conservative -1.14% 7.13%
Fusion Moderate -1.25% 9.79%
Fusion Balanced -1.36% 11.78%
Fusion Aggressive -1.45% 15.55%
Fusion Growth -1.45% 14.38%

  Underlying Allocations (Jefferson National)
   
Allocations PDF




Nationwide marketFLEX Fusion/Fusion Prime Portfolios


This past week’s performance ranged from -1.54% for the more conservative risk profiles to -1.98% for the more aggressive risk profiles. The more conservative portfolios benefited from broader diversification, which included a sizable allocation to a 2X US Dollar fund, which was up for the week. The more aggressive risk profile portfolios were negatively impacted by their sizable positions in precious metals equity and 2X NASDAQ 100 funds, both of which were down on the week.

The portfolio allocations are broad and distinctly different but the combined components of each portfolio delivered returns that were unusually close across the risk spectrum, especially in light of the broad market decline in global markets.

Fusion first targets the risk level suitable for each client and then crafts the portfolio allocations in an effort to maximize return opportunities, seeking to maximize risk-adjusted returns. Portfolios are reallocated approximately monthly. 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-August returns
Fusion Conservative -1.54% 3.40%
Fusion Moderate -1.66% 5.99%
Fusion Balanced -1.81% 7.53%
Fusion Growth -1.82% 7.40%
Fusion Aggressive -1.98% 9.87%

  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


 
  September 15, 2014      
Top of page
  Select Alternatives

Select Alternatives fell 2.57% for the week. The strategy was hurt the most by losses in the AQR Risk Parity Fund, which constitutes 31% of the portfolio and fell 3.31%. The strategy was also hurt by the Deutsche-Global Real Estate Fund, which constitutes 11% of the portfolio and fell 4.03%.

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



 
  September 15, 2014      
Top of page
  Strategic Solutions

Last week global equity, bond, and precious metal markets were lower. This is fairly unusual since it implies that investors removed money from all three major markets without reallocating it during the week. For the week, the top-performing strategies were Managed Income Aggressive (1.51%), Systematic Long/Short Bond Trading (1.39%), and Government Bond Trading (1.25%). The lagging strategies on the week were Fusion Aggressive/32 (-4.17%), Market Leaders Strategic 80 (-4.19%) and Market Leaders Strategic 100 Managed (-4.36%). The leading strategies benefited from being fairly short-term oriented and being short the bond market, as it declined on the week. The lagging strategies were impacted by exposure to a combination of leveraged long, emerging market, and government bond positions.

Strategic Solutions Portfolios
Weekly returns
Managed Income Aggressive 1.51%
Systematic Long/Short Bond Trading 1.39%
Government Bond Trading 1.25%
S&P Tactical Patterns 0.54%

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 EXPRESSLY DISCLAIMS ALL WARRANTIES OF MERCHANTABILITY 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.