WARNING: Past performance does not guarantee future results. Investment returns and principal value will fluctuate, so that an investors’ portfolio value may be worth more or less than their original cost. Investing in any marketable security such as a stock, bond, exchange-traded fund, mutual fund, index or actively managed, does not guarantee that an investor will make money, avoid losing capital, or indicate that the investment is risk-free. There are no absolute guarantees in investing.
Common Sense Advisors/Jeff Voudrie utilizes hypothetical backtesting as it seeks to develop trading strategies, determine the type of market environment a strategy is best suited for and, to the limited extent available, to understand the risk metrics and potential for gain and loss. It is understood and acknowledged that there isn’t any way to know for sure what will happen in any market going forward; nor are there any guarantees of expectations that the backtested strategies will work as tested.
Stock trading/investing involves risk, and you can lose some or all of your investment. Hypothetical or backtested results may not always be duplicated in the real world. Backtesting can at times produce an unintended look-ahead bias. Results can also at times be over or understated due to the possible exclusion of inactive companies. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading, not the least of which is the ability to withstand losses or to adhere to a particular trading strategy in spite of trading losses. These are material points that can also adversely affect actual trading results. The purpose of this presentation is to share some of the research that was done in order to determine a basis for the efficacy of this trending indicator. The focus should not be on the ‘performance’ numbers because due to their nature they are all hypothetical. Some of the indicators and processes that I use are proprietary and may use data, logic and/or signals developed by others to which I subscribe. This particular trending indicator system has been in use real-time since 1986 and my efforts are to try to understand how (or if) it can provide any useful benefit in my portfolio management processes. I do not and cannot make any guarantees in regard to this or any other possible limitation.
Common Sense Advisors