USA Financial Portformulas is known as the formulaic trending money manager. As an SEC Registered Investment Advisor, Portformulas
manages a client's portfolio through a systematic, formulaic process. Portformulas applies a strict quantitative methodology
to each of its models, with the goal of removing human emotion from the investment process. In short, the Portformulas strategy
will identify which holdings to own, how long to own them, and when to sell them.
The first decade of the 21st century has taught us that the "Buy and Hold" philosophy requires an extensive amount of
time to rebuild a portfolio after significant losses in the market. As an alternative to "buy and hold," many investors
and financial advisors have resorted to "Market Timing" in an effort to "time" the bottoms and the tops of the market.
This strategy has proven to be a higher risk with greater inconsistency.
"Market Trending" is a different type of approach that shares some of the positive characteristics of both philosophies.
Historically, it is easy to look at charts of the stock market and point to upward trends and downward trends. It goes
without saying that if you could be invested in the market during the upward trends, and be repositioned in a more
stable investment during the downward trends, you may experience greater long term success.
The challenge is in identifying what may likely happen in the months and years to come. The goal of market trending
is to verify trends and act upon them. However, unlike market timing, market trending is not a reaction to the market,
nor is it a daily buy/sell routine in an effort to predict whether the market will go up or down next. Instead, market
trending seeks to identify longer term trends to potentially increase your odds for long term success. This is what
we do at USA Financial Portformulas. This is Formulaic Trending.
At the beginning of each month, the models we manage are re-evaluated in an effort to help determine what positions
should continue to be owned, and which positions we may wish to add. Each model that is managed has a unique a
specific set of criteria that is followed that determines where the client's assets will be invested. Some models
utilize the patented RAM® Score feature, which is a proprietary management tool utilized to help gauge the
overall trend of the stock market. In addition, some models use this same type of scoring feature, but apply it to
each individual holding every month. These unique asset management tools help to guide us in the unemotional
asset management decisions for each client.
USA Financial Portformulas has custodial relationships with three of the largest custodians in the financial industry,
Trust Company of America and
Pershing. These three custodial
firms were chosen for their advanced technology, which afford us the ability to trade in clients account and
manage risk in a different way than most money managers.
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