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The undeniable truth about the
markets is that they constantly change.
The problem with the conventional
models is that they may work under certain conditions, but
when the conditions change, they stop working.
ZYX Global
Multi Asset Allocation Model has overcome the conventional
limitation as the model is designed to automatically
change as the market conditions change.
We searched the globe and
started
with three sets of inputs -- a large number of diverse
conventional timing techniques already
available to sophisticated
large institutions and fundamental as well as technical data
conventionally used by successful investors.
The focus
of our research was to first narrow the large universe
of such techniques and factors that influence the market to
a handful of factors that have the most predictive
abilities; and then build an adaptive timing model using the
selected factors.
The actual real life results show that we succeeded in
developing a model that automatically changes with the
market conditions to produce high returns while
minimizing risks.
Adaptive
Model
This is
an adaptive model based on eight distinct inter-market,
macro-economic, technical ,and fund flow inputs.
The model
makes two
adaptations in near real time to the eight inputs as
new data becomes available.
First, the
weight of an input is low if the data has been choppy or
directionless. However, if the data offers strong direction,
regardless of the magnitude, the weight of the input
increases. Second, the weight of an input changes based on
its correlation with the price movement of the underlying
market.
Eight
Inputs
At present the following are the key ingredients of
our timing model.
1. Aggressiveness of fund flows
2. Leading global economic indicators
3. Commodity price movements
4. Relationship between currencies
5.Risk appetite as demonstrated by the relationship between
the price movements of the assets deemed safe vs. assets
considered speculative.
6.Price action of the markets at key technical
support/resistance levels
7. Price action of the markets as various classical
technical patterns become apparent
8. Changes in internals of the markets as the prices push through or
fail at key support/resistance levels
Allocation to Cash
The model's approach to cash allocation is unique. In
addition to taking into account risks, the model also takes
into account the probability of better opportunities coming
along in the near future. After all investors who are fully
invested can not easily take advantage of the new better
opportunities.

The model strives for no cash when the
probability of significant new and better opportunities
becoming available in the near future is less than 60% and
it can find assets anywhere in the globe with low risk.
If
the probability of significant new and better opportunities goes over 60%
or low risk opportunities are not available, the
model starts cash allocation. The amount of the cash
increases parabolically as the probability of new better
opportunities goes higher or the risks increase..
Check out performance of the
model since 2007
FREE TRIAL TO THE ZYX GLOBAL MULTI ASSET ALLOCATION ALERT
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