2007-2009 chart comparing S&P 500 and Optimum Mix

This chart compares the growth of $10,000 invested in the S&P 500 from 11/2/2007 through 3/10/2009 with the growth of $10,000 invested in the Optimum Mix during that same period. The investment in the S&P 500 declines from $10,000 to $4,495 while the Optimum Mix declines from $10,000 to $6,417.

Disclosures and Disclaimer

Return percentages and projected balances do not include interest, dividends, fees, or other costs and are based on trades placed at optimal times.

Dividends, transaction charges, management fees, liquidity issues, bid-ask spreads, taxes, and other costs will impact results.

Performance will vary based on the timing and details of trades.

For a description of the risk considerations for each Fund, please refer to each Fund’s prospectus, which should be read carefully before you invest.

References to “cash” usually refer to the money currently held in a sweep account. Proceeds from the sale of a stock or ETF are usually swept into an interest bearing account of some type such as a money market fund that is invested in low-risk, low-return assets such as Treasury Bills and other short-term interest bearing notes.

Markets and investments such as stocks and ETFs are unpredictable and volatile. To reduce downside risk, prices should be monitored and assets exchanged for other assets that are more likely to increase in the near term. Trailing stop loss orders set at a low percentage will trigger frequently due to normal volatility and result in frequent losses that eliminate any possibility of long-term gain.

You can lose money by investing in any fund or stock. Any investment strategy should be one part of a comprehensive investment program. All investments are subject to market risk, including possible loss of principal.

Investors in exchange-traded products such as ETFs will bear risks including but not limited to, risks associated with smaller companies, foreign securities, emerging markets, debt securities, commodities, and derivatives. In addition, investors in exchange-traded products are subject to additional risks that do not apply to conventional mutual funds, including the risks that the market price of ETF shares may be higher or lower than the value of its underlying assets, there may be a lack of liquidity in the shares of the exchange-traded product, or trading may be halted by the exchange on which they trade.

ETF redemptions can be limited and trading fees can apply. Funds may be sensitive to economic, business, political, or other changes which may result in fluctuation of the value of shares and greater risk of loss. Unlike mutual funds, ETFs may trade at a premium or discount to their net asset value.

Principal risks of investing in foreign securities include changes in currency rates, foreign taxation and differences in auditing and other financial standards. Debt securities may be subject to credit risk and interest rate risk. Investments in debt securities typically decrease in value when interest rates rise.

Many advisors would suggest more diversification, but adding additional assets can water down a portfolio’s performance rather than increasing long-term returns. Over-diversification tends to create a false sense of security. Is it really safer to keep money under a mattress or invest in a variety of assets when doing so prevents the possibility of that money growing substantially more in the years to come? We prefer to keep things simple by investing in a few assets that seem likely to appreciate in the near future. 

We believe that Leveraged Momentum is providing the best return that we can achieve without spending considerably more time for little additional benefit. We prefer to spend that time doing other things that provide more satisfaction and fulfillment, and we strive to enable investors to do likewise.

ETFs are relatively new. Data for backtesting a strategy prior to an ETF’s launch date was extrapolated using historical data for the index on which the ETF is based or for another ETF based on the same index along with the historical correlation between the ETF and its related index or between the ETF and the other ETF which is based on the same index.

All results mentioned are hypothetical results and are NOT an indicator or guarantee of future results and do NOT represent returns that any investor actually attained. No representation is being made that any account or portfolio is likely to achieve results similar to those shown. Indexes are not managed and do not reflect management or trading fees. Investors cannot invest directly in an index. 

Many indexes have limited actual historical information. The sponsor of an index may adjust the index in a way that may affect its level, and may, in its sole discretion, discontinue the public disclosure of the intraday index value and the end-of-day closing value of the index. Many indexes lack diversification and are vulnerable to fluctuations in the industry or market segment they are supposed to represent. A limited number of index constituents may affect the index closing level, and an index is not necessarily representative of its focus industry or market segment. An index constituent may be replaced upon the occurrence of certain events as determined by the index sponsor.

Any index data prior to an index’s launch date is hypothetical and a result of the application of the index methodology to historical data which has inherent limitations.

The creation of hypothetical data necessarily involves assumptions and cannot take into account the impact of financial risk in actual trading. Alternative modeling techniques or assumptions may produce different hypothetical back-tested information that might be more appropriate and that might differ significantly from the information presented. Hypothetical back-tested data should not be considered indicative of actual results that might be obtained from any investment. Historical and hypothetical back-tested results are neither an indicator nor a guarantee of future performance.

Because the strategies rely heavily on third party quantitative models, they are subject to model and data risk. Certain returns shown may reflect backtested performance. All performance presented prior to index or fund inception date is backtested performance. Backtested performance is hypothetical and is not based on actual transactions. Backtested data is based on simulations after the fact with the benefit of hindsight. Remembering that backtesting produces hypothetical results based on historical data and extrapolations rather than actual transactions is important. Backtesting may identify relationships that hold true for the testing period by chance (short-term correlation) but then breakdown due to the lack of actual causation (long-term correlation). The text and figures are based on hypothetical results which do not represent actual performance and can be misleading. Securities with positive recent momentum may have had above-average recent returns, may be more volatile than a broader cross-section of securities, and may generate returns lower than other styles of investing or the overall stock market in the future. Momentum can and does fluctuate. Assets that previously exhibited momentum may not continue to do so.

Charts and graphs are provided for illustrative purposes only. Index returns do not represent the results of the actual trading of investable assets. 

Hyperlinks are provided as a courtesy and should not be deemed as an endorsement. When you click a link to a third party website you are leaving our site and assume total responsibility for your use or activity on that third party website.

Opinions and statements of market trends that are based on current market conditions constitute the author’s personal judgment and are subject to change without notice. The views described may not be suitable for all investors. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations.

Past performance does not guarantee future results. No investor should assume that future performance will match the results presented or be positive.

Leveraged Momentum, FANGEtc Momentum, Leveraged Bands, Leveraged Index, Leveraged Crosses, TQQQ Trends, FNGU Trends, BULZ Trends, the Optimum Mix, and every other investment strategy that beats the market during some periods will lose money during some other periods.

Performance data, laws, and regulations can be revised or otherwise change over time which could cause the information in this publication to become outdated and less accurate. The Securities and Exchange Commission (SEC) does not approve or disapprove of any investment. The information in this publication is for informational purposes only and is not intended to serve as the basis for any financial decision or as an offer to sell or purchase any security or investment product. Information contained herein has been obtained from sources believed to be reliable and written in good faith, but the information is not guaranteed. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. References to funds or other assets should not to be interpreted as an offer or recommendation of those securities. Only a prospectus may be used to offer to sell or buy a security, and a prospectus should be considered carefully before investing.

Please carefully read all fund documentation including the prospectus. We urge you to consult your investment, legal, tax, accounting, and other advisers before you invest.

Investing involves risk, and each investor is responsible for determining whether each investment is suitable based on their personal financial situation and objectives. Investment information is provided without consideration of your financial sophistication, financial situation, investing time horizon, or risk tolerance. Readers are urged to consult with their own independent financial advisers with respect to any investment.

The author is not an investment advisor, broker/dealer, accountant, or attorney. No part of this publication should be interpreted as investment, accounting, tax, or legal advice. Each investor should consult with an investment, tax, or legal professional regarding investments and their personal financial situation.

Leveraged Momentum, LLC, was incorporated in the state of Tennessee in 2018. If something should happen to Pete Nikolai then the board of directors will have a message sent to all newsletter recipients suggesting that they sell their positions and invest the proceeds according to the best alternative the recipient can identify.

While we have used our best efforts, we make no representations or warranties as to the accuracy, completeness, timeliness, or correctness of the contents of this publication and disclaim any implied warranties of merchantability or fitness for a particular purpose as well as any responsibility for any liability or loss which is incurred as a result of the application of any part of this publication. Neither we nor our information providers shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or any delay or interruptions in the transmission thereof to the users. All investment information contained herein should be independently verified.

This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher and author are not engaged in rendering investment, legal, tax, accounting, or other professional services. If investment, legal, tax, accounting, or other expert assistance is required, the services of a competent professional should be sought.

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