Adaptive Asset Allocation™

How Does Adaptive Asset Allocation™ Work?

Using the results of millions of mathematical calculations, every 5 weeks subscribers to our AAA service receive unbiased analysis of their mutual funds along with a Model Portfolio showing exactly which funds are best positioned given the reality of the current financial landscape. .

 

THE ADAPTIVE ASSET ALLOCATION™ PROCESS

The HORIZON™ computer model follows a 4-step process.

1. Each mutual fund in a portfolio is first divided into multiple time slices.

2. Next, three factors—Direction (up or down), Degree (angle of movement) and Duration (elapsed time)—of each time slice are evaluated.

3. Each time slice is weighted, and the values of the three factors are added together to produce the Score for the fund. The Score determines the relative performance of a fund to the other choices in the portfolio.

4. Lastly, a percentage-holding amount is then determined for each fund based on the Scores.

The number of time slices, factors, weighting algorithms and percentage-holding amount calculations are the results of five years of extensive study by the Compass Institute. They tested over 500,000 possible permutations of factors to come up with the combination that would provide the optimal results when applied to any combination of mutual funds.