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Investors: Who's Afraid of the Big Bad Crash ? 

Most investors are afraid of losing their money in the next market crash. They ignore two things. First, market crashes are often predictable. Second, there is no need to predict them. Some strategies have made money in all market conditions for more than 15 years, without short selling. We share multi-model portfolios with various investing goals. They are focused on liquid, large cap companies and ETFs. Our newsletters are for informational purposes. We are not a Registered Investment Advisor and this is not investment advice.

- Ypa Market Neutral (weekly): Investing in stocks without fearing the next crash.

- Ypa Growth (weekly): Seeking superior risk-adjusted returns. 

- Ypa Dividend (monthly): Optimizing dividend-growth investing.

 Example of simulated performance:

Core ETF Portfolio
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31% a year* on average for 12 years with a 16% drawdown.
S&P500 Dynamic Dividend Portfolio
Ypa Finance
34% a year* on average for 15 years with a 23% drawdown.

* Past performance is not a guarantee for the future.

Methodology 

Portfolio Diversification

It is better to diversify a portfolio in several strategies based on different logics than in a specific number of stocks and sectors. 

Robust Strategy Design

We elaborate strategies starting from fundamental and technical analysis research and avoid super-optimization.

method

We use professional data providers and an outsourced simulation server certified by Investorside Research Association. The mostly used period of simulation is from January 1999 to December 2013. These 15 years cover all market conditions: two crashes, good years and flat years. We select strategies with a good behavior not only on the whole period, but also every single year.

The Luck Factor

Luck does exist. With the same probability to win (p) and the same average win/average loss ratio (w/l), your account may experience very different possible futures depending on the sequence of gains and losses. Example with w/l=1,4 and p=50%:

Ypa Finance

That is why we select only strategies that have a clearly oriented and focused beam of possible paths, like this one:

Ypa Finance

Going further in risk evaluation, we use probabilistic indicators taking into account the data sample size. Every model is an approximate representation of a real phenomenon. It is impossible to reduce the risk to zero or to predict the future, but it is possible to detect when a strategy goes out of its normal limits.

Psychological Risk

Even a very good strategy may have a 30% drawdown and stay in negative territory during months. Easy to imagine, harder to live. It is better to invest less money than giving up under pressure with a good strategy. Without a long term vision, the short term makes no sense.


* CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.



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"You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right. "
Ben Graham