Aggressive Growth System

Objective:
To generate higher returns with lower risk than buying and holding an S&P 500 Index fund.

Strategy:
The Aggressive Growth System’s strategy is to be invested when the market is rising and either in a money market account or in a reverse stock fund when the market is falling.

How the system works:
The core of the system is our market timing model.  When the market timing model generates a “Buy” signal, client accounts will be invested in one or more of Rydex’s Dynamic funds including: 

• Titan whose objective is to produce 200% of the S&P500’s daily returns;
• Velocity whose objective is to produce 200% of the Nasdaq 100’s daily returns.

Monitoring:
During a “Buy” signal, all the funds in which we’ve invested are monitored on a daily basis.  If at any time any of the funds declines by a pre-determined percentage (usually around 14-16%) that fund will be sold and the proceeds moved to the money market fund.  This “stop loss” system helps us either lock in profits or minimize losses.

When the market timing model generates a “Sell” signal, any funds that haven’t been sold by the stop loss system will be moved to a money market fund to await the next “Buy” signal.  If market conditions warrant, “reverse” funds which appreciate during market declines may be purchased.

Other Considerations:
When it is fully invested the system will hold two to four funds at a time.  In the past, there have been 2-3 switches (round trips) from the market timing model each year.  Implementation of the system requires that an investor be prepared to make between four and twelve trades annually.  This means that in non-tax advantaged accounts, all gains will be taxed as current income.  There are no switching costs when the program is implemented directly with Rydex.

All tables, text and images displayed herein is Copyright (1995-2003) by:
Windsor Financial Advisors, Inc.
P.O. Box 7936
Princeton, NJ 08543
(609) 720-0999

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