The Portfolio Timing using Absolute Momentum Tool allows users to enter a list of symbols and corresponding weightings to construct a standard "Buy and Hold" portfolio and apply an absolute momentum filter to each fund in the portfolio. When a specific fund is performing more poorly than the 'Cash' fund chosen (typically this is a treasury bill rate, but RotationInvest.com allows users to define this as any fund they would like), then the 'Cash' fund is invested in instead of the poorly performing fund.
Fund: The fund chosen here will be compared to each fund in the portfolio, if this fund is doing better (return %) over the period of time (see length below) then this fund will be invested in instead of the fund in the main portfolio.
Length: The length defined here is the length of time to compare each fund in the portfolio to the 'Absolute Momentum Fund' chosen here.
If 100 days is chosen as the length, IEF is the absolute momentum fund, and the portfolio is 60% SPY and 40% MDY: If IEF has a higher % return over the past 100 days than SPY but not MDY - then IEF will take over 60% of the portfolio from SPY, so the allocation will be IEF 60% and MDY 40%.
Note: These features are available in the Advanced Rotation Tool as well in the 'Absolute Momentum' section.
For a research paper anaylizing Absolute Momentum see: http://www.naaim.org/wp-content/uploads/2013/10/00D_Absolute-Momentum_gary_antonacci.pdf
Strategies presented anywhere on this site are ideas only, and only for education.
RotationInvest.com/PortfolioBuilderInvest.com do not provide investment advice, and are not investment advisors.