The universal logic of investing is “buy low, sell high.” Yet investors often get caught up in their emotions. When the markets move downward, they think about getting out or wait until things settle down before committing more money. And when the markets are moving upward, they often hope for it to go even higher before taking gains.
But behavioral finance teaches you that the key is to decide what you will do—how you will react to a financial or market event—before it happens. We don’t advise investors. Instead, we’ve designed and built DynaLogic on models that outline exactly how to react at certain trigger points based on the percentage movement of market price. For a portion of your portfolio, price depreciation warrants a buy and price appreciation warrants a sell.
STRENGTH IN RISING AND FALLING MARKETS
As an ETF sector rises to a pre-determined trigger based on price, DynaLogic will send out a signal to sell a portion of the gains and deposit them in an Opportunity Cash bucket. The more the market rises, the greater the percentage of the gain is sold. The original principle is never sold—only a portion of the gain.
In a declining market, DynaLogic will automatically send out a signal to use Opportunity Cash to buy into a sector. Your portfolio raises cash in up markets, which dampens the decline on the downside. And during protracted declines, Opportunity Cash is put back in the market, so as long as there is cash awaiting re-investment, downside exposure is dampened.
DYNAMIC MANAGEMENT WITH LONG-TERM FOCUS
DynaLogic combines the benefits of an active management discipline with low-cost investment strategies. It uses broad-based Exchange-Traded Funds (ETFs) that hold assets such as stocks, commodities or bonds. ETF returns are consistently close to the underlying sectors they represent, and they’re highly liquid, tax-efficient and low cost. You and your investment advisor will discuss your goals and your comfort with risk, and choose from available models.
A SYSTEMATIC METHOD FOR LOGICAL INVESTING
By removing emotion from the investing equation, you’ll benefit from market volatility instead of being controlled by it. You’ll no longer be sabotaged by your emotions, making decisions at the wrong time—or possibly worse, making no decision at all. DynaLogic decisions are simply based on price, and you’ll understand exactly what’s going to happen as the market moves up or down.
By removing emotion from the investing equation, you’ll benefit from market volatility instead of being controlled by it.