Global Trader, our International plus Domestic ETF Trading Strategy
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Global Trader 
International ETF Trading Strategy

More than half of the world's market capitalization lies outside the U.S. And while the U.S. is the engine that often drives much of the world, sometimes that engine sputters. When it does, capital flows out of the U.S. and into other markets. After all, money doesn't sleep.

One easy solution to gaining international exposure would be to buy ACWI and be done with it. The iShares ETF tracks an index of large and midcap global stocks. But since its inception in 2008, it has returned an average of 5.9% annually. That underperforms the U.S. market by 3% a year.
One could try to pick and choose global assets; an emerging markets fund here, a European fund there. The problem is, even the best of these funds will go through patches that will clobber your portfolio. The emerging markets EEM, for example, lost -16.9% in the 6 years from 2011 to 2016, while the U.S. market was soaring (S&P 500 up 101.2%). All of this makes it tough for buy-and-hold investing.

I think we can do better with thoughtful selection and algorithmic timing.

A Quick Take
The Strategy splits its portfolio into 50/50.
The first half invests in a single international or domestic equity ETF, rebalancing quarterly. The second half offers up an international sector fund or a diverse hedge that rebalances monthly. In the event of a global downturn, 50-100% of the portfolio can revert to a safe harbor bond fund.

Broad geographical exposure.
Tapping international broad-market and sector funds, with the U.S. equity market as a backstop, Global Trader provides the broadest geographic diversification of the models.

An excellent addition.
For the investor who wants to add international exposure - but only when outperforming the domestic U.S. market - Global Trader makes an excellent addition. There's more information below, but if you're ready, why wait? You can be placing your trades today.

  • Immediate access to the private Members Page.
  • Download the current Newsletter.
  • $7.95 per month.
  • Try for 60 days FREE.
  • Cancel any time; no questions, no hassle.
Need more information? OK, let's go in-depth...

Strategy Assets
The following broad-market (international and domestic), sector (international), and hedge funds have been identified for inclusion in the Global Trader strategy:
Our Broad-Market Candidates
Broad Market, International and Domestic
  • EEM- iShares MSCI Emerging Markets ETF
  • EPP - iShares MSCI Pacific except Japan ETF
  • FEZ - SPDR Euro STOXX 50 ETF
  • ILF - iShares Latin America 40 ETF
  • MDY - SPDR S&P Midcap 400 ETF
Our Sector (and Hedge) Candidates
International Sectors
  • IXG - iShares S&P Global Financials Sector ETF
  • IXJ - iShares S&P Global Healthcare Sector ETF
  • IXN - iShares S&P Global Technology Sector ETF
  • JXI - iShares S&P Global Utilities Sector ETF
  • KXI - iShares S&P Global Consumers Staples Sector ETF

Hedge
  • EUO - ProShares UltraShort Euro ETF (2x inverse multiple to daily performance of the euro spot price against the US dollar)
  • SLV - iShares Silver Trust
  • TLT - iShares 20+ Year Treasury Bond ETF
  • UUP - Invesco DB US Dollar Index Bullish ETF (exposure to the dollar against a broad range of developed market currencies)
  • YCS - ProShares UltraShort Yen ETF (2x inverse multiple to the daily performance of the yen spot price against the US dollar)

The Mechanics
As mentioned above, the strategy splits it's portfolio into two equal components. Each component operates within its own parameters and with its own set of assets. Here's how that works...
The Broad-Market 50%
Each quarter, the strategy conducts a risk-adjusted momentum test on the 5 ETFs from the broad-market equity category.

Based on that test, it selects the strongest candidate and buys that ETF to represent half the portfolio. Should none meet the performance criteria, the strategy reverts to a safe harbor investment, namely TLT, the popular iShares 20+ Year Treasury Bond ETF.
The Sector and Hedge 50%
The other half of the portfolio? It rotates monthly between a collection of international sector funds, and select currency and metal ETFs. The latter two classes serve as a hedge, and helps reduce maxDD and volatility.
Summary
So, at any given time, the Global Trader portfolio holds one broad-market international or domestic equity ETF comprising half the portfolio, and one international sector or "hedge" ETF making up the remaining 50%. If market troubles get severe, our "flight to safety" bond fund TLT steps in.

The Numbers
Over the past 14+ years, from 2008 to 2022 YTD, Global Trader has delivered a 4-fold improvement in Total Return over our benchmark SPY.
Chart #1
Global Trader vs. SPY, our proxy for the S&P 500
Total Return | 2008 - 2022 (updated monthly)
Chart courtesy ETFreplay.com

And Global Trader delivered these returns with less volatility and a much lighter max drawdown than our benchmark (see the Compare Strategies page for recent drawdown numbers).
Chart #2
Now, individual years can vary - sometimes dramatically. And full disclosure: of the last 14 full years (2008 to 2021), the strategy underperformed the benchmark half the time: 7 years. And yet still managed a 4-fold improvement in Total Returns.

How can that be? The average winning period has been higher than the average losing period, and those winners add up.
Global Trader vs. SPY
Annual Returns | 2008 - 2022 (updated monthly)
In sum, over the long term, Global Trader delivers international diversification without compromising performance.
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Note: while the strategy rotates out of higher-risk equity funds and into the relative safety of TLT in the event of a global market downturn, nothing short of perpetually holding cash will protect in the event of a flash crash or a sudden jolt to the market.

That said, the pain from most market downturns (i.e. recessions, bursting bubbles, market corrections) can be mitigated by a strategy that switches to relative safety within weeks.

What You Get
Monthly Newsletter
Before the market opens on the first trading day of the month, you'll receive an email newsletter detailing the same actionable buy/sell signals that I will use to trade the strategy in my own account.

Members Page
Subscribers also gain access to the strategy's Members Page, offering up more details including:

  • FAQs
  • Month-to-date returns
  • Weekly performance summaries
  • Total Return charts from 2008 to present
  • A downloadable version of the newsletter
Here's a sample email newsletter...

Ready?
The Global Trader international ETF trading strategy is $7.95 per month. Cancel at any time; no questions, no hassle. Follow along and see how the strategy catches market moves to the upside, while protecting hard-earned portfolios against major downdrafts.

First 2 months are FREE.
"I'm really enjoying your 4 strategies. I appreciate the approach and rules-based, non-subjective way that allocations are made for each strategy." --Ed D.
"We live in interesting times. Your strategies have a great history of performance. I'm using a blended strategy of AM, GT and Bonds. Thanks." --Bob D.
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