We have new portfolio models


On the first day of this month ProVest made changes to our Conservative, Moderate and Growth models that we manage. We believe the changes will lead to better performance in both up and down markets, based on the back-tested data we’ve used.

The primary difference between what we have been doing and what we will be doing is that in the old models we used three or four strategies for each model. Those different strategies changed investments whenever the research called for it, but we stayed in those strategies no matter what. If the model called for 40% of the model to be in the Calendar Effects strategy, we kept the allocation at 40%, no matter what kind of market we were in at the time. While the Calendar Effects strategy is a really good strategy in volatile times, it just doesn’t do very well when there is little to no volatility in the market. And the markets have been very calm over the last three years. So even though staying in that strategy is good for asset allocation, it can be a drag on performance in good and steady economic times.

Going forward we will invest in only one strategy at a time in each of our models. If all three of our market indicators (short-term, intermediate-term and long-term) are positive, the model will be invested in the Positive strategy. If there is a mix of signals (two positive or two negative), your model will be invested in the Neutral strategy. If all three indicators are negative, we will invest your model in the Negative strategy.

We have been investing in these new models for a small number of clients for a few months and the results have been very encouraging so far. We believe now is the time to make this change. Should the market continue its increase in volatility these model changes should work out very well.

All of us here at ProVest really appreciate our clients. We appreciate the loyalty and friendship you have given us over the years. That’s why we continue to do our research and work hard to earn your trust and your business. Thank you.