HOW WE BUY
The key to the Niemann Buy & Sell Roadmap is our proprietary Risk-Balanced Opportunity™ (RBO) approach to investing. RBO evaluates all exchange-traded funds (ETFs) around the world that have at least 1 year of trading history. Each week, we calculate which ETFs have optimum risk-adjusted relative strength. RBO’s goal is to find trends that will perform well without excessive volatility during the journey.
To understand changing dynamics among asset classes and to help pinpoint sweet spots in markets, Niemann sorts RBO’s top 10% into country, index, industry, sector and alternative ETF groups. We assign allocation weights to each group based on the strength of their scores. Tactically, the higher the score the higher percent of the portfolio each group earns.
When determining the allocation weights, Niemann buys ETFs that have the highest RBO scores for each group. After documenting 20+ years of live performance using our proprietary method, we believe these funds offer the best risk-adjusted return potential. However, markets, trends and RBO scores can change very quickly for a variety of reasons.
HOW WE SELL
Niemann analytics are geared to uncover and exploit opportunities in the intermediate or 9-to-15 month time horizon. In all of our strategies, we will sell ETFs and replace them with more attractive opportunities as market conditions change. In bull markets, we might rotate to high momentum ETFs. In bear markets, we usually rotate to more defensive areas. When market risk gets extreme, our risk-managed strategies can go to cash to limit losses. These strategies offer more determined downside protection as volatility and risk increases.
Niemann monitors market risk daily by calculating the ratio of individual stocks that are trending higher. We are essentially measuring the heartbeat and vitals of the market.
If the ratio is determined to be too low, then market risk is too high and Niemann’s downside protection gets activated to protect your client’s wealth.
Stop buying new ETFs, evaluate existing positions and sell down-trending ETFs for cash or cash equivalents. At times our risk-managed strategies can be up to 100% cash.
Learn more about Niemann's ETF Risk Managed Portfolios.