The Signal
Sample Growth and Value Funds
| Symbol | NAME - GROWTH FUNDS |
|---|---|
| ARKK | ARK Innovation ETF |
| CCGR | Capital Group Growth ETF |
| EFG | iShares MSCI EAFE Growth ETF |
| IJK | iShares S&P Mid-Cap 400 Growth ETF |
| IJT | iShares S&P Small-Cap 600 Growth ETF |
| IUSG | iShares Core S&P U.S. Growth ETF |
| IVW | iShares S&P 500 Growth ETF |
| IWF | iShares Russell 1000 Growth ETF |
| IWM | iShares Russell 2000 ETF |
| IWO | iShares Russell 2000 Growth ETF |
| IWP | iShares Russell Mid-Cap Growth ETF |
| IWY | iShares Russell Top 200 Growth ETF |
| MGK | Vanguard Mega Cap Growth ETF |
| MTUM | iShares MSCI USA Momentum Factor ETF |
| ONEQ | Fidelity Nasdaq Composite Index Tracking Stock ETF |
| QQQ | Invesco QQQ Trust Series |
| SCHG | Schwab U.S. Large-Cap Growth ETF |
| SPYG | SPDR Portfolio S&P 500 Growth ETF |
| VBK | Vanguard Small-Cap Growth ETF |
| VONG | Vanguard Russell 1000 Growth ETF |
| VOOG | Vanguard S&P 500 Growth ETF |
| VOT | Vanguard Mid-Cap Growth ETF |
| VUG | Vanguard Growth ETF |
| Symbol | NAME - VALUE FUNDS |
|---|---|
| CGVR | Capital Group Value ETF |
| EVF | iShares MCSI EAFE Value ETF |
| IJH | iShares Core S&P Mid-Cap ETF |
| IJJ | iShares S&P Mid-Cap 400 Value ETF |
| IJS | iShares S&P Small-Cap 600 Value ETF |
| IUSV | iShares Core S&P U.S. Value ETF |
| IVE | iShares S&P 500 Value ETF |
| IWD | iShares Russell 1000 Value ETF |
| IWN | iShares Russell 2000 Value ETF |
| IWS | iShares Russell Mid-Cap Value ETF |
| IWX | Incorrect ETF Name |
| MGK | Vanguard Mega Cap Growth ETF |
| QQQ | Invesco QQQ Trust |
| SCHV | Schwab U.S. Large-Cap Value ETF |
| SPYV | SPDR Portfolio S&P 500 Value ETF |
| VBR | Vanguard Small-Cap Value ETF |
| VONV | Vanguard Russell 1000 Value ETF |
| VOOV | Vanguard S&P 500 Value ETF |
| VOE | Vanguard Mid-Cap Value ETF |
| VTV | Vanguard Value ETF |
The Proof of the Pudding is in the Tasting
It’s one thing for a guy like me with no finance background to suggest an unusual theory of investing, wave around some backtesting results and say “trust me”. It’s another to give you a chance to try it out for yourself. Any factor can be used in a Style Momentum regimen. The most frequently used factor to split the market by is Growth and Value.
My aim here is to demonstrate Binary Style Momentum as a theory of investing, not to give financial advice. So this site presents the investing Signal only. The performance posted on this site is based on the funds I use. The funds you invest in are up to you.
Example ETFs that represent Growth and Value stocks are shown to the right. Most of the examples are index funds, but any Growth or Value funds can be used. Your results will vary, depending on the funds you choose and your skill at buying and selling them.
Binary Style Momentum Procedure
After the market closes on the last trading day of each month, the Style Momentum algorithm calculates whether Growth or Value is more likely to do better in the coming month. The resulting Signal is displayed on the Home page (see illustration, top left).
STEP 0. Choose the Value and Growth funds you want to investment in.
STEP 1. After the market closes on the last trading day of the month, check the Signal.
STEP 2. If the Signal hasn’t changed from the previous month, do nothing.
If the Signal changes, on the next trading day move the entire investment to the other fund.
Each month, repeat Steps 1 and 2.
That’s all there is to it. Just two ETFs and ~20 minutes or less per month.
We Don’t Have to Be Right Every Time
Over the last 24 years it’s been tested, the Signal was correct about 60% of the time. When investing in high-performing Growth and Value funds, the signal has delivered market-beating results in 21 of 24 years (see Yearly Returns table). The disappointments have been modest, while many of the winning years have been amazing.
Caveat Emptor – For Educational Purposes Only
Per the Terms of Use this information is available for educational purposes only to illustrate the Style Momentum process. It should not be construed as a recommendation of how you should invest.