By Steve Blumenthal
May 17, 2017
S&P 500 Index — 2,400
Posted each Wednesday, Trade Signals looks at several of my favorite stock, investor sentiment and bond market indicators. Market trends persist over time and stem from changes in risk premiums or the amount of return investors demand to compensate them for the risks they take.
Risk premiums vary a great deal over time in response to new market information or changes in the economic environment or even changes in investor sentiment. When risk premiums increase or decrease, stocks and bonds and other assets have to be priced again. Investors react to the changes gradually and this creates trends.
Rules-based trend following strategies don’t predict, they react to what prices are telling us about supply and demand. More buyers than sellers or vice versa. Trend following strategies, in general, seek upside potential via an investment process that offers downside protection.
Trend following trading seeks to capture the majority of a market trend, up or down, for profit. Such strategies work in all major asset classes — stocks, bonds, currency and commodities. Click here for our education series piece “Trend Following Works!”
Trade Signals is organized into three sections:
- Trade Signals — Dashboard
- Commentary — CMG Indices
- Supporting Charts with Explanations
I hope you find the information helpful in your work. For informational purposes only… Not a recommendation to buy or sell any security.
Trade Signals — Dashboard
Equity Trade Signals (Green is Bullish, Orange is Neutral and Red is Bearish):
- Ned Davis Research CMG U.S. Large Cap Long/Flat Index: Buy Signal – Bullish for Equities
- Long-term Trend (13/34-Week EMA) on the S&P 500 Index: Buy Signal – Bullish Cyclical Trend for Equities
- Volume Demand (buyers) vs. Volume Supply (sellers): Buy Signal – S/T Bullish for Equities
- Don’t Fight the Tape or the Fed: Indicator Reading = 0 (Neutral for Equities)
Investor Sentiment Indicators:
- NDR Crowd Sentiment Poll: Extreme Optimism (S/T Bearish for Equities)
- Daily Trading Sentiment Composite: Neutral Optimism (S/T Neutral for Equities)
Fixed Income Trade Signals:
- CMG Managed High Yield Bond Program: Buy Signal — Bullish for High Yield Bonds
- CMG Tactical Fixed Income Index: Bullish Trends for Municipal Bonds and Emerging Market Sovereign Debt
- Zweig Bond Model: Buy Signal — Bullish for Fixed Income
- Global Recession Watch Indicator – Low Global Recession Risk
- Recession Watch Indicator – Low U.S. Recession Risk
- Inflation Watch – High Inflation Risk. The focus has shifted from deflation to inflation.
- Longer-term Indicator — 13-week vs. 34-week exponential moving average: Buy Signal
- Shorter-term Indicator — Daily Gold Model: Sell Signal
Commentary — CMG Indices
Notable this week:
No signal changes since last week’s post. The equity market, as measured by the Ned Davis Research CMG U.S. Large Cap Long/Flat Index, remains bullish. Don’t Fight the Fed or the Tape remains neutral. The Zweig Bond Model remains in a buy signal. The short-term gold trend indicator is in a sell signal. Investor sentiment is now Extremely Optimistic, which is S/T bearish for equities. Inflationary pressures are high but moderating. The overall weight of trend and breadth evidence supports a continuation of the cyclical equity bull market.
Here is a look at various CMG “TREND” Indices and Benchmark Comparisons (gross and net of hypothetical max costs):
Ned Davis Research CMG U.S. Large Cap Long/Flat Index: 7.41% YTD, 18.20% 1 Year, 8.64% 3-Year Annualized, 12.89% 5-Year Annualized. *Benchmark is S&P 500 TR Index (benchmark numbers above in chart). Source: S&P DJ Indices
Important note: Not a recommendation for you to buy or sell any security. For information purposes only. Please talk with your advisor about needs, goals, time horizon and risk tolerances.
Equity Markets: The overall trend remains bullish as measured by the Ned Davis Research CMG U.S. Large Cap Long/Flat Index (a trend-based indicator) and the 13/34-Week Moving Average Trend and Volume Demand (more buyers than sellers). Don’t Fight the Fed or the Tape (Trend) is neutral.
As this relates to the CMG equity-based indices:
- CMG Beta Rotation Index is positioned in the Vanguard Total Stock Market ETF (a higher beta equity market index ETF).
- NDR CMG U.S. Large Cap Long/Flat Index is positioned in the S&P 500 Index.
The weight of evidence for the equity market remains bullish.
Fixed Income: Our fixed income trend indicators remain bullish on bonds.
- CMG Tactical Fixed Income Index is positioned in high yield bonds and Emerging Markets Sovereign Debt ETFs.
- The CMG Managed High Yield Bond Program (trend following) is in a “buy” signal.
- The Zweig Bond Model is in a “buy” signal.
Follow the daily, weekly, monthly and annual performance of the CMG Tactical Fixed Income Index here.
Tactical All Asset:
CMG Opportunistic All Asset Strategy: Following is the updated portfolio summary:
- The Strategy is allocated approximately 45% to equities and 55% to fixed income.
Liquid Alternatives — Gold and Managed Futures:
- The short-term trend is bearish… see trend charts in the gold section below.
- The long-term cyclical trend remains bullish; however, nearing a sell signal.
- I favor up to 5% in gold with an increase to 10% when the long-term trend turns bullish. 0% exposure when both S/T and L/T indicators are bearish.
- Managed Futures — As measured by the the Morningstar Managed Futures Index, managed futures continue to underperform. The index is up 0.27% YTD, down 1.68% over the last three months, up 0.63% over the last month and down 2.79% over the last 12 months. (Source: Morningstar)
Important: Not a recommendation to buy or sell any security. For information and discussion purposes only. Consult your investment advisor regarding investment objectives, suitability and risk tolerance.
Supporting Charts with Explanations
1. Ned Davis Research CMG U.S. Large Cap Long/Flat Index – Buy Signal — The momentum and market breadth data is signaling bullish for U.S. Equities. See how it works below.
S&P Dow Jones is the calculation agent behind this Index. Click on the logo below.
Legend: S = Sell Signal; B = Buy Signal. Period is 1992 to present.
Here is how it works:
- The process measures the underlying strength of the S&P 500 Index by evaluating the trend across 22 sectors that make up the Index and plots the results daily. See the CMG NDR U.S. Large Cap Long/Flat Index line (center of chart).
- In simple terms, a bullish market environment will take many, if not most, stocks and sectors higher. The reverse is true in bear market environments.
- When the CMG NDR U.S. Large Cap Long/Flat Index line is trending higher, the Index is fully invested in the S&P 500 Index. To be in a defined uptrend, the Index simply needs to be higher than it was 42 days ago.
- If the level of the Momentum Index line is lower than it was 42 days ago, then the index process “steps out” or “reduces market exposure” from 100% to 80% to 40% to 0% market exposure depending on the overall level of the CMG NDR U.S. Large Cap Long/Flat Index line.
- Think of it as a systematic way to de-risk (raise cash) or re-risk (invest in large cap stocks).
- Therefore, if the trend across the 22 sectors, as plotted above by the CMG NDR U.S. Large Cap Long/Flat Index line, is higher than it was 42 days ago, the signal is a buy signal.
- If the trend is lower than it was 42 days ago, the signal is a sell signal. Simple and straight forward. We track this in the bottom section of the chart labeled “Composite Direction.” If it is higher than the red horizontal line, then the trend is positive. If lower, the trend is negative.
- Next, if the index line is above 70 (an environment where most stocks/sectors are doing well… broad-based positive sector participation), then the signal is always a buy signal (i.e., remain 100% invested). We give a strong equity market trend environment the benefit of the doubt.
- If the CMG NDR U.S. Large Cap Long/Flat Index line is between 60 and 70 and the trend is lower than it was 42 days ago, then the process steps from 100% invested to 80% invested.
- If the CMG NDR U.S. Large Cap Long/Flat Index line is between 50 and 60 and the trend is lower than it was 42 days ago, then the process steps from 80% invested to 40% invested.
- If the CMG NDR U.S. Large Cap Long/Flat Index line is below 50 and the trend is lower than it was 42 days ago, then the process steps from 40% invested to 0% invested.
- Most of the really bad stuff tends to happen when the majority of stocks are in decline; therefore, the model moves to 100% cash if the Index line is below 50 and the trend is down.
- In all cases, if the CMG NDR U.S. Large Cap Long/Flat Index line is higher than it was 42 days ago, the process moves back to a 100% invested position.
The investment objective is to be invested when the overall health of the market, as measured across 22 sectors, is strong and rising and to reduce exposure to the market when the trend is weakening and declining.
Returns, shown at the bottom section of the chart, are hypothetical. Noted are comparisons to the S&P 500 Index (Total Return) in terms of GPA% (gross percent per annum), Sharpe ratio and max drawdown. The model did 30% better over times and max drawdown was -19.7% vs. -55.3% for buying and holding the S&P 500 Index.
Overall, the process is a disciplined, systematic process designed to reduce risk (raise cash) and systematically increase risk (fully invest).
By the way, there is a Long/Short version of the Index. The model goes from 100% to 80% to 40% invested in the same way as Long/Flat; however, when the model trend line moves below 50, the process goes short U.S. Large Caps or short S&P 500 Index exposure. Here’s the data (note in the lower left-hand chart the model returns – a several hundred basis point improvement in model return):
2. 13/34–Week EMA Trend Chart: Bullish Cyclical Trend for Stocks
Note (in the chart below – upper right-hand corner) that the 13-week EMA (blue line) has crossed above the 34-week EMA trend (red line) late first quarter 2016 (a trend buy signal). The Cyclical Trend for Stocks is bullish by this measure. You can see that this trend process has done a pretty good job at identifying the major cyclical bull and bear market trends (note small red and blue arrows). A good stop-loss level may be at the point when the 13-week drops below the 34-week.
Click here to see “How I think about the 13/34-Week Exponential Moving Average.”
3. Volume Demand vs. Volume Supply – Buy Signal (S/T Bullish for Equities)
The process looks at a smoothed total volume of declining issues versus a smoothed total volume of advancing issues using a broad market equity index. The performance below is when Vol Demand is above or below Vol Supply. More buyers than sellers or more sellers than buyers. This is a relatively slow-moving but important indicator.
- S&P 500 Index Gain/Annum: The yellow highlight in the charts that follow shows the current regime, percent gain per annum and the amount of time since 1981 to present (which includes the great bull market of 1981 to March 2000) and 1997 to present.
- Conclusion: Markets are stronger when there are more buyers than sellers.
Here is how to read the next chart:
- The black line is NDR’s Volume Demand calculation (buying pressure)
- The red line is the Volume Supply (selling pressure)
- When the buying pressure is stronger than selling pressure, the market does better (since 1981 11.42% gain per annum)
- When the selling pressure is stronger than buying, the market does worse (since 1981 -0.52% per annum)
- I’ve highlighted the 2000-2002 bear market and the 2008-2009 bear market. Red arrows mark the cross to a sell, green arrows mark the cross to a buy.
Here is the model’s data:
4. Don’t Fight the Tape or the Fed – Indicator Reading = 0 (Neutral for Equities). Current reading highlighted in yellow (below). The indicators that comprise this reading are a combination of NDR’s Big Mo and the 10-Year Treasury yield. It highlights just how important Fed activity is to market performance. Readings range from +2 to -2.
- The chart below shows Gain/Annum based on the combined indicator reading (1999 to present). Current indicator score is highlighted in yellow from 1980 to present (including the great bull market of 1980 to March 2000). Same conclusion. Don’t fight the Fed or the Tape:
NDR Crowd Sentiment Poll: Extreme Optimism (S/T Bearish for Equities). Current reading highlighted in chart below. The current weekly sentiment reading is 70. It was 70.2 last week. Best buying opportunities occur at “Extreme Pessimism” readings below 57.
- Gain/Annum for the S&P 500 Index (data from December 1, 1995 to present). Current indicator score highlighted in yellow:
Daily Trading Sentiment Composite: Neutral Optimism (S/T Neutral for Equities). Current reading highlighted below.
- The current daily sentiment reading is 53.33. It was 52.22 last week. Best buying opportunities occur at “Extreme Pessimism” readings below 41.5.
- 1994 to Present and 2006 to Present (current indicator score highlighted in yellow):
The Zweig Bond Model: “Buy Signal” – a bullish signal for high quality fixed income bond funds and ETF exposure.
Current indicator score highlighted in yellow (bottom right section):
- How you can calculate the model on your own – detailed in the upper left section of chart. How to Track the Zweig Bond Model. Click here for more info about the Zweig Bond Model.
- This next chart box details the drawdown (“Max DD %”) history and a few other statistics: For example, the largest drawdown (if your $100,000 declines 10% to $90,000 over the period of time measured, your drawdown is 10%).
- Barclays Aggregate Bond Total Return has a max drawdown of -14.12% vs. a max drawdown for the Zweig Bond Model of -5.06%.
- You can compare the Barclays Aggregate Bond Index Total Return Max DD to the Model’s Max DD. Hoped for is a higher return and a lower DD. Also listed is the hypothetical growth of $1,000.
- 13-week vs. 34-week exponential moving average: Buy Signal
- Daily Gold Model: Sell Signal
Chart 1: 13-week vs. 34-week exponential moving average: Buy Signal
First, a look at the long-term cyclical trend in gold: Buy signals occur when the 13-week moving average trend line (blue line) crosses above the 34-week moving average trend line (red line). Sell signals occur when the 13-week moving average trend line (blue line) crosses below the slower moving 34-week moving average trend line (red line).
Green arrows indicate buy signals, red arrows sell signals. Note green arrow far right.
Source: StockCharts.com; CMG Capital Management Group, Inc.
Nearing a bearish cross lower (a one-year look at the same chart. Blue line remains above red):
The next chart is a shorter-term gold trend signal.
Chart 2: Daily Gold Model: Sell Signal
Thank you for your interest in this weekly post. It is appreciated. It helps me to stick to a long-term focused, disciplined investment process and I hope it helps you as well. See important disclosures below. For information purposes only – NOT A RECOMMENDATION TO BUY OR SELL ANY SECURITY. Talk with your financial advisor for specific recommendations.
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With kind regards,
Stephen B. Blumenthal
Executive Chairman & CIO
CMG Capital Management Group, Inc.
Philadelphia – King of Prussia, PA
CMG Advisor Central – Educational Pieces and White Papers
Several client educational pieces:
- When Beating the Market Isn’t the Point
- Trend Following Works!
- Correlation, Diversification and Investment Success
- The Merciless Math of Loss (this is about how compound interest works for you and significant loss against you)
- Here is a link to our Advisor Blog page
- Here is a link to our Advisor Resource page
CMG is committed to setting a high standard for ETF strategists. And we’re passionate about educating advisors and investors about tactical investing. We launched CMG Advisor Central to share our knowledge of tactical investing and managing a successful advisory practice.
Advisor Central is being updated with new educational resources we look forward to sharing with you. You can always connect with CMG on Twitter at @askcmg and follow our LinkedIn Showcase page devoted to tactical investing.
Ned Davis Research:
For years, I have subscribed to Ned Davis Research. They are an independent research firm. Their clients are institutional (professional) investor clients like CMG. They are one of the most respected research firms in the business.
They offer several levels of subscription. You can contact them directly at Ned Davis Research at 617-279-4878 to learn more. Please know that neither I nor CMG are compensated in any form. I’m just a big fan of their research and their way of thinking. As a side, Ned Davis authored one of my favorite books, Being Right or Making Money. A great book full of sound, practical advice.
Trade Signals History:
Trade Signals started after a colleague asked me if I could share my thoughts (Trade Signals) with him. A number of years ago, I found that putting pen to paper has really helped me in my investment management process and I hope that this research is of value to you in your investment process.
Every week, I share with you research I find valuable. No one indicator is perfect, but we believe risk can be assessed and should be managed. Some of this research helps to shape our thinking around risk management and it helps us think about how we might size various risks within the construct of a total portfolio. For example, overweight or underweight equities/fixed income and how much one should consider allocating to tactical/liquid alternative exposures (such as managed futures, global macro, long/short equity). When and what to hedge? Shorten or lengthen bond maturity exposure? We believe such risks can be managed and, to us, broad portfolio diversification is important. If you’d like to talk to us about how we use some of these indicators within our various investment strategies, please email me or email our sales team.
From an investment management perspective, I’ve followed, managed and written about trend following and investor sentiment for many years. I find that reviewing various sentiment, trend and other historically valuable rules-based indicators each week helps me to stay balanced and disciplined in allocating to the various risk sets that are included within a broadly diversified total portfolio solution.
My objective is to position in-line with the equity and fixed income market’s primary trends. I believe risk management is paramount in a long-term investment process. When to hedge, when to become more aggressive, etc.
For hedging, I favor a collared option approach (writing out-of-the-money covered calls and buying out-of-the-money put options) as a relatively inexpensive way to risk protect your long-term focused equity portfolio exposure. Also, consider buying deep out-of-the-money put options for risk protection.
Please note the comments at the bottom of this Trade Signals discussing a collared option strategy to hedge equity exposure using investor sentiment extremes is a guide to entry and exit. Go to www.cboe.com to learn more. Hire an experienced advisor to help you. Never write naked option positions. We do not offer options strategies at CMG.
Visit http://www.theoptionsguide.com/the-collar-strategy.aspx for more information.
Diversification – Suggested Client Talking Points:
A diversified investment portfolio is designed to meet pre-defined investment goals. It is often hard to stay the course when stress presents. That is when many investors make mistakes. Diversification means that not all investment risks perform at the same time. For example, managed futures and long/short funds have underperformed the last several years but are outperforming recently. We’d all like to be in the best performing areas all the time, but that is just not possible.
Major market events tend to present one or two times per decade. It is for this reason that a longer-term view can provide a useful perspective. We know that many investors incorrectly sold out of the markets during the tech bubble in 2000-2002 and again with record selling at the height of the 2008 great financial crisis. No one knows exactly how the current distress will play out.
For some time, I’ve been talking about the following: the issues in the high yield bond market, issues that can present post-QE and zero interest rate policy, issues with unmanageable debt in Europe, Japan and China and the issues a rising dollar may trigger as it relates to the $9 trillion in EM debt that was borrowed in dollars. As much as I’d like to think I do, I don’t know for sure which or how and when any of the above risks present and the degree to which they might play out.
What we can do is build portfolios that are diversified across a number of risk factors and market environments. We can identify periods in time to become more or less aggressively positioned (overweight when valuations are cheap and underweight when they are expensive). We can manage risk not only by the collections of ETFs and funds selected but also how we combine them together. Diversification brings meaningful improvement to portfolios designed to achieve a return objective over a long-term period of time.
I see the world of investing through a lens of risk and reward. Ultimately, it is far more important to minimize losses than to capture the best gains. Find me someone or some way to always capture the best gains – impossible, doesn’t exist. I’m friendly with some of the world’s greatest investors and none of them see themselves as perfect.
Over time, it’s really about understanding the power of compound interest. To this end, I wrote a paper entitled, The Merciless Math of Loss.
IMPORTANT DISCLOSURE INFORMATION
Investing involves risk. Past performance does not guarantee or indicate future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by CMG Capital Management Group, Inc. or any of its related entities (collectively, “CMG”) will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. No portion of the content should be construed as an offer or solicitation for the purchase or sale of any security. References to specific securities, investment programs or funds are for illustrative purposes only and are not intended to be, and should not be interpreted as recommendations to purchase or sell such securities.
Certain portions of the content may contain a discussion of, and/or provide access to, opinions and/or recommendations of CMG (and those of other investment and non-investment professionals) as of a specific prior date. Due to various factors, including changing market conditions, such discussion may no longer be reflective of current recommendations or opinions. Derivatives and options strategies are not suitable for every investor, may involve a high degree of risk, and may be appropriate investments only for sophisticated investors who are capable of understanding and assuming the risks involved. Moreover, you should not assume that any discussion or information contained herein serves as the receipt of, or as a substitute for, personalized investment advice from CMG or the professional advisors of your choosing. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisors of his/her choosing. CMG is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice.
This presentation does not discuss, directly or indirectly, the amount of the profits or losses, realized or unrealized, by any CMG client from any specific funds or securities. Please note: In the event that CMG references performance results for an actual CMG portfolio, the results are reported net of advisory fees and inclusive of dividends. The performance referenced is that as determined and/or provided directly by the referenced funds and/or publishers, have not been independently verified, and do not reflect the performance of any specific CMG client. CMG clients may have experienced materially different performance based upon various factors during the corresponding time periods.
The CMG Tactical Fixed Income Index, CMG Tactical All Asset Index, CMG Tactical Equity Index and CMG Beta Rotation Index (the “Indexes”) are rules-based indexes that reﬂect the theoretical performance an investor would have obtained had it invested in the manner shown and do not represent actual returns, as investors cannot invest directly in the Indexes. The Indexes’ returns represented do not reﬂect the actual trading of any client account. No representation is being made that any client will or is likely to achieve results similar to those presented herein. Unless specifically noted, performance results are presented net of a 2.50% maximum annual fee deducted from the account balance quarterly, in arrears.
CMG Tactical Fixed Income Index Performance Disclosure: For the period of January 2003 through the present, this presentation represents a hypothetical back-test of an allocation to the CMG Tactical Fixed Income Strategy. Unless noted, all performance is presented net of the current advisor fee (2.50%) for the program, paid quarterly in arrears. The performance results shown include the reinvestment of dividends and other earnings. Performance is not net of custodial fees.
Any ﬁnancial product based on the CMG Tactical Fixed Income Index, CMG Tactical All Asset Index, CMG Tactical Equity Index and CMG Beta Rotation Index or any index derived therefrom that is oﬀered by CMG Capital Management Group, Inc. is not sponsored, endorsed, sold or promoted by Solactive AG and Solactive AG makes no representation regarding the advisability of investing in the product.
This info service is oﬀered exclusively by Solactive AG, Guiollettstr. 54, D60325 Frankfurt am Main, EMail: email@example.com. The ﬁnancial instrument is not sponsored, promoted, sold or supported in any other manner by Solactive AG nor does Solactive AG oﬀer any express or implicit guarantee or assurance either with regard to the results of using the Index and/or Index trade mark or the Index Price at any time or in any other respect. The Index is calculated and published by Solactive AG. Solactive AG uses its best eﬀorts to ensure that the Index is calculated correctly. Irrespective of its obligations towards the Issuer, Solactive AG has no obligation to point out errors in the Index to third parties including but not limited to investors and/or ﬁnancial intermediaries of the ﬁnancial instrument. Neither publication of the Index by Solactive AG nor the licensing of the Index or Index trade mark for the purpose of use in connection with the ﬁnancial instrument constitutes a recommendation by Solactive AG to invest capital in said ﬁnancial instrument nor does it in any way represent an assurance or opinion of Solactive AG with regard to any investment in this ﬁnancial instrument. This document is for the information and use of professional advisors only. Remember, the information in this document does not constitute tax, legal or investment advice and is not intended as a recommendation for buying or selling securities. The information an d opinions contained in this document have been obtained from public sources believed to be reliable, but no representation or warranty, express or implied, is made that such information is accurate or complete and it should not be relied upon as such. Solactive AG and all other companies mentioned in this document will not be responsible for the consequences of reliance upon any opinion or statement contained herein or for any omission.
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Hypothetical Presentations: To the extent that any portion of the content reflects hypothetical results that were achieved by means of the retroactive application of a back-tested model, such results have inherent limitations, including: (1) the model results do not reflect the results of actual trading using client assets, but were achieved by means of the retroactive application of the referenced models, certain aspects of which may have been designed with the benefit of hindsight; (2) back-tested performance may not reflect the impact that any material market or economic factors might have had on the advisor’s use of the model if the model had been used during the period to actually manage client assets; and, (3) CMG’s clients may have experienced investment results during the corresponding time periods that were materially different from those portrayed in the model. Please Also Note: Past performance may not be indicative of future results. Therefore, no current or prospective client should assume that future performance will be profitable, or equal to any corresponding historical index (e.g., S&P 500 Total Return or Dow Jones Wilshire U.S. 5000 Total Market IndexSM) is also disclosed. For example, the S&P 500 Total Return Index (the “S&P”) is a market capitalization-weighted index of 500 widely held stocks often used as a proxy for the stock market. S&P Dow Jones chooses the member companies for the S&P based on market size, liquidity, and industry group representation. Included are the common stocks of industrial, financial, utility, and transportation companies. The historical performance results of the S&P (and those of or all indices) and the model results do not reflect the deduction of transaction and custodial charges, nor the deduction of an investment management fee, the incurrence of which would have the effect of decreasing indicated historical performance results. For example, the deduction combined annual advisory and transaction fees of 1.00% over a 10-year period would decrease a 10% gross return to an 8.9% net return. The S&P is not an index into which an investor can directly invest. The historical S&P performance results (and those of all other indices) are provided exclusively for comparison purposes only, so as to provide general comparative information to assist an individual in determining whether the performance of a specific portfolio or model meets, or continues to meet, his/her investment objective(s). A corresponding description of the other comparative indices, are available from CMG upon request. It should not be assumed that any CMG holdings will correspond directly to any such comparative index. The model and indices performance results do not reflect the impact of taxes. CMG portfolios may be more or less volatile than the reflective indices and/or models.In the event that there has been a change in an individual’s investment objective or financial situation, he/she is encouraged to consult with his/her investment professionals.
Written Disclosure Statement. CMG is an SEC registered investment advisor principally located in King of Prussia, PA. Stephen B. Blumenthal is CMG’s founder and CEO. Please note: The above views are those of CMG and its CEO, Stephen Blumenthal, and do not reflect those of any sub-advisor that CMG may engage to manage any CMG strategy. A copy of CMG’s current written disclosure statement discussing advisory services and fees is available upon request or via CMG’s internet web site at http://www.cmgwealth.com/disclosures/advs.