Recent History & New Developments
for 2025 and Beyond.

OmniFunds v2 was released in July 2024.  From there through December, they outperformed the Market by as much as 8-to-1 in live trading.   I've interviewed a number of OmniFunds customers, including Nick Wold, who gained 87% in his margin account from August to December.  Watch Interview

Most Version 2 OmniFunds are positive since they were deployed. For example, NAS100 Medium Growth, shown above, is up 47%.  However, the market hasn't fared so well.  As of today, the S&P 500 is negative and shows signs of going lower.  We are clearly in a Bear Market.  

When you're investing, staying out of harm's way is almost as important as making gains.  OmniFunds' goal is to engage the Bull Markets and avoid the Bear Markets.  The Good News?  All our OmniFunds have been in cash throughout the decline, awaiting The Return of The Bull.  

A Volatile Market in Q1 of 2025

From December 18 to present, the Market went through a series of unusual market events which are listed below.

• Fed Funds Announcement - On December 18, The FED held an FOMC meeting, implying it was unlikely to lower rates any time soon.  The Market dropped 3.5%.
• Up 4, Down 4, Repeat - In early January, the NASDAQ went into a "Cyclical Mode" where it gained several percent over 3-4 days, only to turn down to where it started in the same amount of time, several times. Our Researcher implemented a way to detect this so OmniFunds can go to cash should this occur in the future.
• Chinese AI? - On Sunday, January 23, news coming from China indicated the Chinese had built a superior A.I. at a fraction of the cost.  This announcement caused NVDA and AVGO to drop 18% each Monday morning.  We were in AVGO.
• Tariff Announcement - As the political climate heated up with uncertain news surrounding Tariffs and other events, the Market became unstable, going into a free-fall on February 21 and losing over 22% by April 4.

Counter-Measures

I put my wife's retirement account in this OmniFund on January 28, and since then she's had about a 2% Draw Down and is up about a percent as of April 4.

After the market began showing heightened volatility, we issued posts in our private OmniFunds Circle Community*, suggesting that users reduce allocation and/or switch into less-aggressive OmniFunds, like Safe Harbor Diversified Low Draw Down.

Using AI to Trade Bear Markets

Rather than move to cash in down markets, users have asked if there is a way our OmniFunds can make money in market declines. The answer is yes, with Inverse ETFs, Defensive Stocks, and AI-Generated Market States.

Trading Inverse ETFs

Inverse ETFs go the opposite direction of a target Index ETF.  For example, SPY is the most liquid ETF representing the S&P 500.  The inverse ETF, SH, moves precisely the opposite to SPY.  So, in a down market, we can buy SH.  

The only problem with doing this is the market is upward-biased, so we must be relatively certain it's headed south before we buy the inverse. 

We have been using Artificial Intelligence to build hedge methods that purchase inverse ETFs alongside Long positions in stocks when weakness enters the market.  This protects the positions from further downside movement.  Of course, if the market keeps going down as it recently did, the hedge can generate significant profits.

Results so far are very promising, and I expect to make an announcement in April about our findings and ideally, the deployment of new Portfolios that implement the hedge.

AI-Generated Defensive Stock Lists

Defensive Stocks are stocks that are mostly impervious to market corrections, like staples drugs, and utilities.  They are often purchased as a hedge against Bear Markets.

We are harnessing the power of Artificial Intelligence to build these historical defensive stocks lists over the past and apply our Algorithms to them.    

AI-Generated "Market States"

We are also using building intelligent Market States (Likely to Trend, Likely to Decline, etc.) that identify weak, strong and sideways markets.  Here is a screen shot of the new Market States we arrived at last week, 100% generated by generative AI on our servers.

Awaiting The Return of The Bull

Here at Nirvana Systems, we are never "done" improving improving our products, and OmniFunds is no exception.  That's why your OmniFunds investment will continue to grow in value.  As the Market has declined, our researchers have been hard at work on the additional enhancements discussed above.  

We expect the current research to yield robust Portfolios we can add to OmniFunds this month (April).  We will keep subscribers updated in our OmniFunds Circle Community.  The economy may be rather unpredictable right now, but I personally believe 2025 is going to end up as an incredible year for stocks.   The Bull has always come back.

Ed Downs
CEO, Nirvana Systems, Inc.

Ed demonstrates the enhancement and new V2 OmniFunds in this 9-Minute video.

OmniFunds can determine bullish and bearish Market States, which enables them to stop trading in bear markets.   But from 12/20/24 to 1/20/25 we saw an unusual market that wasn't really a bear market - it was indecisive, moving strongly up for a day or two, followed by strong downward movement and repeating the pattern - basically "whipsaws" that led to a modest draw down.  

We realized this kind of indecisive, volatile market happens from time to time, and agreed it would be really great if our OmniFunds could detect that situation, in order to reduce trading in those cases. 

Our esteemed Algo Designer, Stephen G. Byrne took on this challenge and began testing ways to detect such a market. The result of his work is the new "Version 2" OmniFunds, which were just added to the new OmniFunds Beta Page*.  They do a great job of avoiding these volatile, "whipsaw" markets.  HOWEVER, the additional benefit of this new Risk Control was both surprising and exciting!

In each case, RETURNS improved by a substantial margin, with draw downs maintained within a few points of the originals.   These new V2 OmniFunds are showing one-year simulated returns from 200% to 250%, with max draw downs in the 10-13% range. That is simply phenomenal!

While past performance is not a guarantee of future results, we are especially encouraged by the 20-year simulation, showing these new OmniFunds beating their predecessors' performance by as much as 25% per year.  

One way to approach a new OmniFund is to reduce allocation as explained in Higher Returns with EVEN LESS Risk.  If these stats are replicated in live trading, investing just 25% would mean a 50% annual gain, and draw downs would be around 2-3%.  I'm fairly sure that most investors would be quite happy with that.   But account allocation is a decision each OmniFunds investor must make on his or her own.  It can be changed at any time on the MyOmniFunds dashboard.

Sincerely,
Ed Downs

*About the Beta OmniFunds Page

You can reach the Beta OmniFunds page by scrolling to the bottom of the OmniFund List on the Explore page and clicking the Beta OmniFunds link.  Then, select one of the Beta OmniFunds to see its historical equity curves and parameters.   We expect to keep these OmniFunds in Beta for 90 days to let the build some trading history, and then move them to the Explore page.

Video: https://youtu.be/EbA8eGKsT5M

Greetings!  Ed Downs here.  It's January 9th, and for the past few weeks we've seen a highly volatile market.   Two things are happening:  (1) nearly every global stock market is trading at all-time highs, and (2) there is a lot of uncertainty ahead of the new administration taking office in 12 days.   I personally think the economic changes that are coming will be highly positive for the markets, and especially where Energy is concerned.  But right now, there is uncertainty.

We have added several powerful risk controls to OmniFunds 2, including the use of Algorithms for Switching, Earnings Report Avoidance, and advanced Market States for determining when to go to cash.  But with the current volatility, some OmniFunds users have asked, "Is there a way to reduce risk even further in times like this?"  

YES, there is!  Remember, with OmniFunds, YOU ARE IN CONTROL.  In this 18-minute video, I cover the 3 ways investors can reduce exposure in OmniFunds using features we have added over the past year.  

Watch "Higher Returns with EVEN LESS Risk" now:
https://youtu.be/EbA8eGKsT5M

There is no more classic approach to investing than "Buy and Hold".  The extensive use of Index Funds attests to its popularity.  In bull markets, this approach can certainly yield great returns, especially if the investor selects an Index Fund that is in a strong growth mode, like one based on Artificial Intelligence stocks. 

Is there is a way to get much higher returns than this "Buy & Hold" approach? OmniFunds is based on investing in lists of stocks, such as today's "A.I. Stocks" group. The difference is in how it switches between stocks to maximize gains and minimize draw downs. In this article, Steve Byrne shows a recent example that demonstrates a dramatic improvement in returns using the OmniFunds approach.

Click Here for Steve's Full Article, "Comparing Buy & Hold investing to OmniFunds"

Editor's Notes:   I am pleased to publish Steve Byrne's brilliant insights into the nature of the current market, as he describes it in "Are AI Stocks Driving the Market?"  Steve has continued to push forward with his research on identifying the best growth stocks. In this effort, he created a Portfolio called "TopAI" which uses the most liquid AI-centric stocks in the market and another on the Russell 3000 using similar filtering and ranking concepts to illustrate the similarity in performance between the two lists.  - Ed Downs

Click Here to download the "Are AI Stocks Driving the Market?" full article.

New OmniFunds

Steve used these Portfolios to bring out two new OmniFunds, ‘NAS100 & AI Mixed Growth’ and "NAS100 & RUSS3000 Mixed Growth", as featured below.

New OmniFund using Nasdaq 100 and Top AI Portfolios (10/18/24)

New OmniFund using Nasdaq 100 and Russell 3000 Portfolios (10/18/24)

We just released a significantly improved version of OmniFunds 2.
Here is a summary of the changes:

1. Market on Close Execution - Improves Profitability by as much as 100% by increasing gains and reducing draw downs!
2. Immediate Order Execution on Changes - Any change you make to an OmniFund (switching funds, allocation, etc.) can be made immediate.
3. Avoiding the Pattern Day Trading Rule - When changes are made, OmniFunds ensures that an Entry and Exit will not be made on the same day for any symbol.
4. Trade up to 200% on Margin - We now support trading full margin in OmniFunds 2
5. Symbol Issues Addressed - There was a problem with $VIX that was addressed (for Lab users)

Click here for a document that explains the changes.

In Ed's interview with OmniFunds creator Steve Byrne, Steve explains the concepts he applied to create his winning OmniFunds, including the use of Growth Metrics and Growth Since Earnings calculations.  He also explains why his OmniFunds trade fewer stocks to achieve maximum gains with low draw owns over time.

Click here to watch the video.

OmniFunds a was created in 2017 primarily as an ETF Switching Platform, which slowly evolved into a Stock-Switching platform over the next 6 years.  

The primary features added were:

1. The ability to use multiple Portfolios in an OmniFund
2. Risk Controls for exposure and Earnings Dates.
3. The ability to import Indicators from OmniTrader, using any Plug-In indicator available from Nirvana Systems.
4. Improved Statistical views (per timeframe)

Click here for a document that lists all changes.

OmniFunds 2 launches today!   In this overview video, Ed Downs explains what was added to the original platform to create OmniFunds 2, how legacy users can engage it and also about the new Premier Level that was made possible by the work of our Associates.

Click Here to watch the video.

In this article by OmniFunds designer Steve Byrne, he explains his philosophy and approach to creating winning OmniFunds. 

"My Omnifund development is primarily focused on specificity, not diversification. Each fund employs numerous safeguards, including rigorously tested filters and switches. My strategy aims to maximize returns by continuously investing in the top performing stocks.

An Omnifund is a precision tool, employing ranking and switching. In its basic form, it can rank a list of stocks based on any given criteria. For instance, in 2020, one of my Omnifunds ranked TSLA at the top of the ranking for growth stocks, a position it held for most of the year. An investment in TSLA for the whole of 2020 would have returned over 600%. Similarly, in 2023, NVDA was the top-ranked growth stock for most of the year, promising a return on investment of over 250%. Even during the market downturn of 2022, an investment in XLE would have returned over 50%.

Omnifunds are not rigid. They can switch in and out of stocks, adapting to market conditions. For instance, if a stock at the top of the ranking enters a downturn, an Omnifund can swiftly switch into the next stock in the ranking that is trending up. A market-state switch can also be set to exit any trades during a market downturn. Ranking switches and the market-state switch can be adjusted independently to limit drawdowns, showcasing the Omnifund’s adaptability.

Regular switching of ranked stocks can increase the benefit of compounding, provided they are switched at the right time.  Diversification can be introduced by using different ranking criteria, but the criteria should have a solid foundation; any reduction in returns should be avoided.

Black swan events can be minimized by using an appropriate ranking list, e.g., the Top 20 high-cap stocks NAS100. In addition, an Omnifund can avoid whipsaws by using an appropriate filter. Trading through Earnings can also be avoided.

Drawdowns are inevitable for any investment. Remember, unless equity is realized immediately following a drawdown, the loss has not actually been incurred.  If investors require diversity in their investments, it would probably be beneficial to invest in several different Omnifunds (future Omnifund feature).  Each Omnifund should have its own distinctive ranking criteria.

Finally, I like to use a horse racing analogy to clarify my position regarding specificity.   Imagine you're at a horse racing event, and you have the option to bet on multiple horses in a race. Diversifying your bets would mean spreading your money across several horses, hoping one of them wins. My approach with Omnifunds is like studying, by rigorous analysis, each horse's past performances and their current form, and then placing my bet on the one horse that has the highest likelihood of winning.

Instead of spreading my bets thin and hoping for the best, I put my money on the horse with the best odds of winning. If that horse starts to falter, I can quickly switch my bet to the next best horse, always keeping my money on the strongest contender at any given moment. I know I will be on the winner at the end of the race."

Steve Byrne