There is no guarantee the Dynamic Alpha Macro Fund will achieve its investment objective. No investment product or strategy is guaranteed to generate a profit or prevent a loss.
Important Risks: Investing in mutual funds involves risk, including loss of principal. Risks specific to the Dynamic Alpha Macro Fund are detailed in the prospectus and include limited history of operations; equity securities risk; futures and commodities risk (including currency, debt, equity, energy, metals and agricultural commodities risk); ETF risk; market risk; management risk; shorting risk; small and mid-capitalization stock risk and taxation risk. For a complete description of risks specific to the Fund, please refer to Fund’s prospectus.
Request A Prospectus: Investors should carefully consider the investment objectives, risks, charges and expenses of the Dynamic Alpha Macro Fund prior to investing. This and other important information can be found in the Fund’s prospectus and summary prospectus. To obtain a prospectus, please call 1-833-462-6433 or access online at https://regdocs.blugiant.com/dynamic-alpha-macro/ . The prospectus should be read carefully prior to investing.
S&P500 TR: The Standard and Poor’s 500 is a capitalization weighted index of 500 stocks representing all domestic industry groups. S&P500TR assumes reinvestment of any dividends.
50% S&P 500/50% ICE BofA ML US 3-Month T-Bill Index: This composite index blends U.S. equity market exposure with short-term government debt. It consists of a 50% allocation to the S&P 500, representing 500 large-cap U.S. companies, and a 50% allocation to the ICE BofA Merrill Lynch U.S. 3-Month Treasury Bill Index, reflecting U.S. Treasury Bills with a 3-month maturity. The index assumes the reinvestment of dividends and employs periodic rebalancing to maintain its target allocations. This combination offers investors a balanced exposure to the growth prospects of the U.S. economy and the stability of government-backed assets, making it suitable for those seeking a mixture of growth potential and risk mitigation.
Relationship Disclosure: Advisors Preferred, LLC serves as Advisor to the Dynamic Alpha Macro Fund, distributed by Ceros Financial Services, Inc., Member FINRA/SIPC. Advisors Preferred and Ceros are commonly held affiliates. Dynamic Wealth Group, LLC serves as Subadvisor to the Fund is not affiliated with the Fund’s advisor or distributor.
< Commentary
HOW IS AN ASSET ALLOCATION LIKE A COOKIE RECIPE?
What is a Recipe?
A list of ingredients, with specific instructions on how much of each ingredient and specific instructions on what to do with them, in order to achieve the goal of making a cookie.
What is an Asset Allocation?
A list of investments, with specific instructions on how much of each investment and specific instructions on what to do with them, in order to achieve a financial goal.
Ingredients: Both recipes and asset allocations require ingredients.With a cookie, it’s usually butter, sugar, eggs, flour, baking soda, chocolate chips, & salt.One of the key ingredients with a cookie, that many are surprised about is the salt.However, if you leave the salt out of a cookie, it doesn’t taste good.You see, you can’t just add sugary ingredients.The same can be said with a properly designed asset allocation.If you just include highly correlated investments, where everything goes up at the same time, it usually means they would all go down at the same time.Diversification essentially means always having to say you’re sorry.Namely not everything in a properly designed asset allocation will be performing at the same levels at the same times.
Instructions:Recipes involve following a set list of instructions to mix the ingredients in a certain order and then to bake them for a set time frame.Asset allocation is the same, you need to mix the investments, and let them ‘bake’ or stay invested for a set period of time.And just like with a cookie, if you take it out too early, it won’t taste as good.Same with your investments, selling long-term investments too soon will not work out well.The same can be said if you leave a cookie baked too long, it will burn.Same with your investments, if you leave your aggressive investments in too long, you could get burned if you need to access them closer to your goal.That is why ongoing active management of an asset allocation is key and needs to always be tied to your goals.Just like a recipe, you don’t want to get a cookie recipe if you’re trying to make a stew.The recipe has to be directly tied to the end goal, same with an asset allocation, goals drive everything.
Buying the Ingredients: When following a recipe, you first need to search for and buy the ingredients.You can go out and shop for the best flour, the best sugar, butter, chocolate chips, etc.. and then find an average run-of-the-mill recipe.The same can be said with an asset allocation, historically this is the typical way one would build an asset allocation.They spend the majority of their time trying to find the ‘best’ investment for each category.For example, searching for the best large-cap growth fund, large-cap value fund, or small-cap fund, etc.And then those investments are placed in an average stock/bond allocation.
For example, if someone wanted to have a moderate risk tolerance, they might target 50% stocks & 50% bonds.We believe this is a less-than-optimal approach, with little alpha being able to be produced.
Refer to our blog titled: “The ABC’s (Alpha, Beta, Correlations…) of investment fund analysis” for details on alpha of other important investment terms.
Another approach to a recipe/asset allocation is to just get average ingredients/investments and then find an amazing recipe/asset allocation. This is similar to buying index funds & ETFs and then trying to build an amazing asset allocation. This can require significantly more time to properly manage the asset allocation, especially if it is a more active allocation.
We think it’s possible to combine the two, find amazing investments, and also build an amazing asset allocation. Just like with a cookie recipe, if you find amazing ingredients, and combine that with an amazing recipe, you get one amazing cookie!
We call our approach Multi-Dimensional Asset Allocation. By utilizing different allocation approaches within a larger primary allocation, one can dramatically increase the level of diversification within their portfolio. The main goal of an asset allocation is to help smooth out the return experience, thus increasing the likelihood of sticking with the investment program, and hence realizing one’s goals.