Q. How do I know Pro-Folio really works?
A. Because our market-timing strategy was documented in a scientific research journal, The Journal of Wealth Management, in 2007 (download the research paper). In fact, while we wish we could take credit for inventing this strategy, we can’t! The value of Pro-Folio is easy step-by-step guidance on how to achieve the results described in the scientific research paper. While we cannot guarantee future performance, the amazing results of this simple technique have been proven over 36 years – from 1973 through the end of 2012.
If you read the academic paper and you feel like you can follow the strategy without our help, more power to you! We wish you all possible success.
Q. I don’t know anything about investing, are you sure I can do this?
A. Yes! You don’t need to know anything except how to read and follow simple instructions. Any ONE of our products tells you EVERYTHING you need to know to be successful at investing and market-timing.
Q. I probably have to buy a bunch of different products to actually be able to get results, right?
A. No! Anyone can get ALL the information they need from any ONE of our products. The Pro-Folio USA products are totally FREE – just visit the blog. The Pro-Folio Global products are available for a reasonable fee. Pro-Folio Global is available as a do-it-yourself booklet or as an email subscription that tells you exactly what to trade and when.
Q. What investments are in your model?
A. Our USA model portfolio invests in five (5) low-fee ETFs – Exchange Traded Funds. Our Global model portfolio invests in six (6) ETFs. ETFs are very similar to mutual funds, except that they can be bought or sold any time the market is open, instead of only after the market closes each day. Also, in general, ETFs have lower embedded fees than most mutual funds, although there are exceptions.
Q. Are there any hidden fees?
A. Pro-Folio does not charge any fees other than the purchase price or annual subscription price of the products or services you choose to buy.
It is important to know that the ETFs within the Pro-Folio portfolio have fees embedded in their performance – however these fees are less than 1% annually. In addition, by following the trading strategy in your discount broker account, you will be charged transaction fees by your broker when you buy and sell. Those fees vary for each different broker firm.
Q. How often will I buy and/or sell investments?
A. Historically, the average holding period for each trade in the Pro-Folio model is over a year. With only 5 investments to trade (6 for Pro-Folio Global), one trading window per month, and average holding period of a year, you can expect to buy or sell usually only a few times a year. Pro-Folio is a long way from day trading!
Q. Will I always make a profit on every trade?
A. No. In fact, slightly less than half of the trades signaled by the Pro-Folio strategy end up making money. Is that crazy? No! What makes the model work so well, is the fact that you won’t stay in your losing trades very long, but you WILL stay in your winning trades for a long time! You will keep your winning trades an average of 21 months (average gain 36%), but you’ll keep your losing trades for less than 4 months (average loss -4%).
Q. Will Pro-Folio Always Out-perform the Market?
A. No. Especially during periods of extended bull markets, such as most of the 80s and most of the 90s, Pro-Folio returns may lag slightly behind the buy-and-hold strategy. But historical data shows that Pro-Folio has made up for that lower performance by performing in down markets far better than buy-and-hold. And, with only one down year since 1973, we believe that Pro-Folio may help you sleep at night knowing your investments have a lower risk profile and a higher likelihood of overall positive performance.