Dear Friends and Subscribers,
It’s been over two years since we launched Maestro Capital Research and set up The Forte Strategy on the Collective 2 website for public access. We wanted to provide a general update of our progress during this time and an overview of our plans going forward.
The table below summarizes our performance since inception (Feb 2, 2018) through the first quarter of 2020. We are pleased with the results of our trading models during this historically volatile time for the market. The Forte strategy significantly beat the common S&P 500 benchmark both in gains and drawdowns in multiple timeframes. The r-squared correlation of the strategy to the S&P 500 is quite low and desirable at 0.16.
The following two images are taken from Collective 2 for reference. These are updated daily and are maintained by Collective 2. They provide an excellent, objective and clear record of performance:
Collective 2 also offers the ability to auto-trade subscriber accounts; that is, as we enter orders into the Collective 2 web-portal, the trades are simultaneously and automatically executed in the Forte subscribers’ independent Interactive Brokers accounts. This works effortlessly and accurately – we currently have four subscriber accounts set up this way and have executed a total of 856 trades.
Our trading strategies have undergone three evolutions while retaining mathematically-driven mechanical constructs with no subjective factors considered when entering or exiting a trade. Our first generation models used large-cap stocks and with a basic swing trade approach. We then evolved into using both long and inverse leveraged ETFs for the second evolution. After suffering a 10.7% loss in August 2019, we developed completely new 3rd generation trend-following models that take into account the current market volatility to determine when to enter and exit trades. So, if the volatility is high-enough for an extended period of time, the models shut down completely. This has been the case during the recent and historic COVID-19 pandemic sell-off as you can see by the flat line on the right-edge of the graph.
We feel confident that a volatility-governed trend following structure provides a strong foundation for building long-term successful trading models. We now have proven models in place to trade long equity, gold, and oil markets using leveraged ETFs. Our research and development efforts continue with a focus on expanding this list to include both long and short positions and futures contracts for the more agile investors. We are also working on an automated trading platform that will feed Collective 2 with trades during the course of the trading day. This automated approach will save management time and also provide more accurate and timely trade executions.
If you have not already done so, we encourage you to explore the offerings within Collective 2 and review our Forte Strategy in greater detail. If interested, we’d be happy to set up a friends and family strategy subscription-discounted rate at $20/month. And please let us know if you’d like any assistance with linking an Interactive Brokers account to the Forte strategy for auto-trading.
Thanks for your continued support and interest in our efforts to develop and offer an attractive and innovative approach for a small group of investors. Please reach out to us anytime if you have any questions.
Tom Bertolino and Roger Koehler