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

It is with great pleasure that I am announcing the release of OmniFunds 2 - a new platform based on the original OmniFunds, but greatly enhanced based on what we have learned since OmniFunds 1 was released in 2017.

OmniFunds 2 is based on several new concepts:

Trading Multiple Portfolios.   The original site only allowed 2 portfolios, and allocation between them was fixed.  OmniFunds 2 spreads allocation across as many Portfolios as the OmniFund designer wants to include in the OmniFund

Avoiding Earnings Risk:   Every Portfolio can be set to have an Earnings Test, such that any symbol that is within X days of having an Earnings Report published will be avoided by OmniFunds.  Likewise, the software can wait for Y days after an Earnings Report to allow the stock to be traded.

Allocation Control:  OmniFunds 2 has a setting at the OmniFund Level that allows a maximum percentage per symbol to be specified.  This avoids cases where the user does not want to be allocated more than (say) 50% in any single position.  There is a counter argument that investing 100% in the best stock in the market is a viable approach, and evidence would suggest this is true.  But now, the OmniFunds Pro user can control this aspect of allocation to suite their requirements.

Condor Capital Wealth Management recently released their Robo Report for Q1 of 2024.  As with all other years we have investigated, the Robo Advisors continue to perform very poorly, compared to the overall stock market.  

In the middle of the Report is a table showing the main Robo Advisor performance for the past 5 years, 3 years, 1 year and Year to Date (Q1).  

Focusing on the SOLID GREEN line, we can see the average annual gain over the past 5 years was only about 6.5%.   

By contrast, the market was up an average of about 14% per year over the past 5 years, which is more than DOUBLE the Robo Returns. 

Here's an image of the Dow Jones Industrial ETF, DIA.

Year after year, the evidence continues to suggest you would be better off buying ANY market index ETF, such as SPY, QQQ, or DIA compared to investing in pretty much any Robo Advisor.  

Once again, we see that Robo Advisors consistently under-perform the major market indices.   As we say here at IFM,  "Returns Matter."  Because they do.

Visit Condor Capital Wealth Management for archived Robo Reports going back to 2017.  You can also click the link near the top of the page to download the latest edition. 

Eric Severance is an esteemed partner of Nirvana Systems, Inc. and Intelligent Fund Management.  He has pioneered many concepts in our platforms, including OmniVest.  Eric is currently working on an OmniFund that uses Historical Lists he has created and maintained in OmniVest.  Watch for its emergence in OmniFunds2!

- Intelligent Fund Management