​Key Takeaways
 
We think the following points stand out when one reviews the performance statistics of our strategies.

• Returns are higher than for Buy & Hold – Much higher in the case of our Momentum strategies.
• Risk (drawdowns) are lower than for Buy & Hold – Much lower in the case of our Safeguard 1st Strategy.
• Risk-adjusted returns (Sharpe Ratios, Sortino Ratios, and Net Profit as a % of Max Drawdown) are all significantly improved.
• All the strategies generate significant Alpha above the S&P500 Total Return Index..
• Correlations of our strategies with the market are very low.  If fact, they are in the range of bond investments, which make some our strategies a suitable option for portfolio diversification.
  • The average correlation between the return of the S&P 500 Index and the 10-Year Treasury Bond was 0.34 percent between 2000 and 2014.
• By combining momentum strategies with our Seven Samurai Risk Model, we eliminate the inherent weaknesses of typical momentum strategies.
  • We eliminate short leg of traditional momentum strategies as it is expensive, hard to manage.
  • Instead we go to cash when the environment turns risky, thereby avoiding momentum crashes.
  • Momentum Strategies + Seven Samurai = Perfect Match!

• Our momentum strategies provide three layers of risk management.
  • Seven Samurai buy/sell signals.
  • Inherent risk management of momentum:  sell if momentum stops after 52 weeks.
  • Stop losses, manually executed if an individual stock losses more than 13.5 percent.