OUR SISTM™

How are we different?
What makes Sage Investment Strategies stand out from all other investment newsletters? In a word, it’s our trademarked SISTM – short for Sage Investment Strategies Timing Model. Our proprietary SISTM employs an advanced mathematical algorithm that incorporates investment principles of strategic asset allocation, tactical asset allocation, diversification and momentum investing to optimize returns and manage risk. More simply put, the SISTM determines which investments to buy, when to buy and when to sell – removing all emotion and doubt from the investment selection process.

How does the SISTM work?
For each portfolio we first determine the strategic asset allocation – in other words, what percent of the portfolio should be allocated to each asset class – for example, large cap and small cap US stocks; international and emerging market stocks; US and international real estate stocks; energy, precious metals, industrial metals, agriculture and livestock commodities; short term, intermediate term, long term, inflation protected and foreign bonds; foreign currencies; and money market funds. These percentages are fixed for each portfolio strategy, but in a moment we’ll discuss how the SISTM generates timing signals to "fine-tune" the strategic asset allocation – or perform what we call “tactical asset allocation.”

We then select the best investment vehicles to implement our strategic asset allocation. Our investment vehicles of choice are low-cost exchange traded funds (ETFs) and no-load index  funds which provide superior diversification and risk management compared to individual stocks.

Next our SISTM collects and evaluates a daily flow of investment data. Using a series of complex mathematical formulas, the SISTM evaluates the investments employed in each portfolio’s strategic asset allocation and periodically generates timing signals like an on/off switch to determine the respective tactical asset allocation. In other words, the SISTM evaluates each investment and determines whether to buy, hold, or sell and go to cash for that particular investment. These timing signals enable an investor to get in on up-trending markets while side-stepping prolonged down-trending markets. By avoiding prolonged market downturns in each asset class, the SISTM significantly lessens portfolio drawdown compared to a “buy-and-hold” strategy of remaining fully invested regardless of the length and severity of market downturns.

Depending on market conditions for each of the asset classes, the Sage Investment Strategies model portfolios may be anywhere from 0% to 100% fully invested (or conversely, 0% to 100% in the safety of money market funds) depending on the timing signals generated by the SISTM. The model assumes that all non-invested funds are parked safely in a money market fund earning interest until needed.

How has the SISTM performed over the last three years?
Look at the most recent results of our portfolios' performance (the solid lines) compared with two key benchmarks (the dashed lines) over the past 52 weeks. The chart and tables below are updated weekly.

Besides comparing return data for the Sage Investment Strategies portfolios against the two benchmarks, look carefully at the last three columns which contain vital data that is very important but little understood by most investors. Few investment newsletters publish this data for fear they would lose subscribers! 

Maximum drawdown (52-Wk Max DD) measures the worst drop in value over the past 52 weeks. It represents the percent difference between the highest value and the subsequent lowest value of a portfolio or benchmark. Notice how large the drawdowns are for both benchmarks compared to the four Sage Investment Strategies portfolios.

Standard deviation (52-Wk Std Dev) measures volatility over the past 52 weeks. The larger the number, the more volatile and risky is the investment. Notice how volatile both the S&P 500 Index and the hypothetical portfolio of 60% stocks/40% bonds are compared to the Sage Investment Strategies portfolios.

Sharpe Ratio (52-Wk Sharpe) measures how well the return of a portfolio or benchmark compensates the investor for the risk taken. Positive numbers are better than negative numbers and higher positive numbers signify better risk-adjusted returns. Notice how much the Sharpe Ratios of the Sage Investment Strategies portfolios exceed the Sharpe Ratios for the two benchmarks, indicating significantly better risk-adjusted returns.
 

How has the SISTM performed over longer periods?
A well respected portfolio manager and quantitative analyst conducted a 33-year back-test of the algorithm from which our SISTM is derived. The results of his testing showed that the algorithm that governs the SIS Basic 5-Class and 10-Class portfolios produced a compound annual growth rate (CAGR) of 11.92% compared to 11.24% for the S&P 500 for the 33-year period. Even more significant, a portfolio following the strategy during the test period would have experienced a worst year return of +1.40% (gain) compared to a worst year return of -26.47% (loss) for the S&P 500 Index. And the model’s volatility, as expressed by a statistical measure called “standard deviation”, was only 6.61%, just a fraction of the 17.47% standard deviation of the S&P 500.

Instead of spending hours and hours each month researching, evaluating and selecting investments, investors can spend more time with the people they love and more time doing the things they love. Enjoy the convenience and peace-of-mind in knowing all of the latest buy, hold and sell ratings automatically calculated using our advanced SISTM. Optimize your portfolio with routine assessments. Just leave all of the research and calculations to us! Sign-up, today!

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