THE Model
What is a Hedge or Hedging?
According to Investopedia.com: ".…hedging is actually the practice of attempting to
reduce risk, but the goal of most hedge funds [today] is to maximize return on investment.
The name is mostly historical, as the first hedge funds tried to hedge against the downside
risk of a bear market with their ability to short the market (mutual funds generally can't
enter into short positions as one of their primary goals). Nowadays, hedge funds use
dozens of different strategies, so it isn't accurate to say that hedge funds just "hedge risk".
In fact, because hedge fund managers [may] make speculative investments, these funds
can carry more risk than the overall market."
Given the traditional definition, hedging can be used defensively to offset or even
eliminate anticipated, or predicted, market declines by raising cash levels (effectively
reducing long exposures) or by keeping long investments in place while buying downside
protection in the form of short positions. On the other end of the hedge risk-return
spectrum, there are more aggressive strategies that use margin when there are strong
indications the market will move in a specific direction.
TheHedgersEdge (THE) provides stock market timing signals to assist an informed
investor in managing their own investments much like a hedge fund. This can result not
only in superior results relative to a buy-and-hold investment approach but does so
with For example, from 2000 through 2002 the S&P 500 was down as much as
-49% using a buy-and-hold approach while THE Signal's maximum draw-down was only
-7% for the same period and ultimately returning +100% by the end of 2002.
We offer three subscription levels based on a proprietary, quantitatively based model
(THE Model) which uses a number of unique technical indicators. These indicators are
based on technical metrics related to the S&P 500, the Nasdaq 100 and the Russell 2000
indices.
These indicators make up THE Score. THE Score is a numerical value which provides a
quantitative prediction on the future direction of the U.S. stock market. For example, a
high score value is signaling a strong prediction of the U.S. stock market rising, a very low
score means the market is expected to fall. A score in the middle of the range signals a
lack of a clear market direction.
THE Score is then used to generate a Long, Short or Cash signal (THE Signal). In
addition, THE Score can estimate the strength of THE Signal via the Plus Indicator. The
Plus Indicator is a simple ON or OFF signal which can be used in combination with THE
Signal. When the Plus Indicator is ON it means THE Model has a higher statistical
expectation that the current Signal (Long or Short) will outperform. This can be used to
either add to existing positions and/or to use margin while THE Plus Indicator is ON.
THE Basic subscription includes THE Signal which will indicate if the THE Model is signaling
a Long, Cash, or Short. The strength of THE Signal, as represented by THE Plus
Indicator, is provided in THE Plus and THE Professional subscription levels. THE
Professional level is for investment related organizations serving other investors or
offering investment related services.
Go to Subscribe for further information.
When comparing similar services be certain to evaluate the variability of their
stated results as many timing models will be fully invested at all times. While this approach
may maximize returns it also exposes one to significant draw-downs if their signal is on the
wrong side of the market. Also, be aware that some services will only issue a Cash signal if
a stop loss has been triggered. THE Signal, on the other hand, will exit the market pro-
actively rather than reactively, helping to reduce overall system draw-downs. Please
review THE About Others for further information.
The performance results for THE Signal and THE Plus Indicator can be reviewed in THE
Results section. Also, be sure to review the FAQ for additional information on how THE
Model subscription service works.
What is a Hedge or Hedging?
According to Investopedia.com: ".…hedging is actually the practice of attempting to
reduce risk, but the goal of most hedge funds [today] is to maximize return on investment.
The name is mostly historical, as the first hedge funds tried to hedge against the downside
risk of a bear market with their ability to short the market (mutual funds generally can't
enter into short positions as one of their primary goals). Nowadays, hedge funds use
dozens of different strategies, so it isn't accurate to say that hedge funds just "hedge risk".
In fact, because hedge fund managers [may] make speculative investments, these funds
can carry more risk than the overall market."
Given the traditional definition, hedging can be used defensively to offset or even
eliminate anticipated, or predicted, market declines by raising cash levels (effectively
reducing long exposures) or by keeping long investments in place while buying downside
protection in the form of short positions. On the other end of the hedge risk-return
spectrum, there are more aggressive strategies that use margin when there are strong
indications the market will move in a specific direction.
TheHedgersEdge (THE) provides stock market timing signals to assist an informed
investor in managing their own investments much like a hedge fund. This can result not
only in superior results relative to a buy-and-hold investment approach but does so
with For example, from 2000 through 2002 the S&P 500 was down as much as
-49% using a buy-and-hold approach while THE Signal's maximum draw-down was only
-7% for the same period and ultimately returning +100% by the end of 2002.
We offer three subscription levels based on a proprietary, quantitatively based model
(THE Model) which uses a number of unique technical indicators. These indicators are
based on technical metrics related to the S&P 500, the Nasdaq 100 and the Russell 2000
indices.
These indicators make up THE Score. THE Score is a numerical value which provides a
quantitative prediction on the future direction of the U.S. stock market. For example, a
high score value is signaling a strong prediction of the U.S. stock market rising, a very low
score means the market is expected to fall. A score in the middle of the range signals a
lack of a clear market direction.
THE Score is then used to generate a Long, Short or Cash signal (THE Signal). In
addition, THE Score can estimate the strength of THE Signal via the Plus Indicator. The
Plus Indicator is a simple ON or OFF signal which can be used in combination with THE
Signal. When the Plus Indicator is ON it means THE Model has a higher statistical
expectation that the current Signal (Long or Short) will outperform. This can be used to
either add to existing positions and/or to use margin while THE Plus Indicator is ON.
THE Basic subscription includes THE Signal which will indicate if the THE Model is signaling
a Long, Cash, or Short. The strength of THE Signal, as represented by THE Plus
Indicator, is provided in THE Plus and THE Professional subscription levels. THE
Professional level is for investment related organizations serving other investors or
offering investment related services.
Go to Subscribe for further information.
When comparing similar services be certain to evaluate the variability of their
stated results as many timing models will be fully invested at all times. While this approach
may maximize returns it also exposes one to significant draw-downs if their signal is on the
wrong side of the market. Also, be aware that some services will only issue a Cash signal if
a stop loss has been triggered. THE Signal, on the other hand, will exit the market pro-
actively rather than reactively, helping to reduce overall system draw-downs. Please
review THE About Others for further information.
The performance results for THE Signal and THE Plus Indicator can be reviewed in THE
Results section. Also, be sure to review the FAQ for additional information on how THE
Model subscription service works.
Invest with an Edge
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