Bringing you live news and features since 2006 

Reality Shares launches new Guardian market strength indicator


ETF and index provider Reality Shares Advisors has launched the Guardian Indicator, a proprietary new market-strength indicator designed to identify long-term directional changes in the stock market.

The Guardian Indicator’s forecasting algorithm applies a unique combination of momentum and volatility gauges to the sectors of the S&P 500 to signal long-term market downturns and alert investors to decrease market exposure in order to mitigate the impact on their portfolios.
“Markets are subject to extended downturns driven by both fundamental and emotional factors, but Reality Shares’ Guardian Indicator provides a quantitative signal to identify market trends and help to mitigate the impact of price declines,” says Eric Ervin (pictured), President and CEO of Reality Shares Advisors. “The Guardian methodology uses a disciplined approach to help investors reduce volatility and risk in their portfolios, and has a wide range of applications for investors looking to navigate the noise and volatility of the markets.”
Under the Guardian methodology, a negative indicator in either its momentum or volatility gauge is predictive of a declining market. To generate the most accurate forecast, the Guardian Indicator applies this methodology to each of the 10 sectors of the S&P 500 in order to measure the broad-based health of the market. When eight or more of the sectors are positive, the Guardian Indicator is positive and the overall market is predicted to rise. When three or more of the sectors turn negative, it signals a broad market decline.
The Guardian Indicator has been successful identifying major long-term market declines in backtested (simulated) results. Over the past 15 years, it correctly forecast both of the major bear markets in the US, signalling to reduce market exposure from 14 September, 1999 until 21 May, 2003, during which time the S&P 500 Total Return Index fell 27.23 per cent. It also signalled to exit the equity markets from 17 December, 2007 until 8 July, 2009, when the S&P 500 fell 36.75 per cent.
As a result, the Guardian Indicator has been shown to enhance returns and reduce volatility through a wide range of market conditions. In backtested results for the 20 years from 1995 through 2014, investing in the S&P 500 Total Return Index (SPXT) during positive Guardian Indicator signals and shifting assets to the Barclays US Aggregate Bond Index during negative signals would have generated average annual returns of 14.3 per cent, about 40 per cent greater than the 10.6 per cent return for the S&P 500 alone. Over the same period, the Guardian Indicator strategy had 10.5 per cent average annual volatility, nearly one-third less than the 15.1 per cent volatility for the S&P 500.

Latest News

Saving and investing app, Moneybox, has doubled the number of ETFs available on the platform, in the light of ‘growing..
Global X ETFs has announced the appointment of Ryan O'Connor as its Chief Executive Officer effective as of April 8, 2024. ..
Value-driven structured credit investing firm, Angel Oak Capital Advisors, LLC, has announced the completed conversions of two of its mutual..
Confidence in the continuing strength of bitcoin and Ethereum is driving wider interest in altcoins and other digital assets, according..

Related Articles

Sal Esposito, Zacks Investment Management
Zacks Investment Management started doing investment research in 1978 and in 1992 started its investment management arm, initially with SMAs...
Jeremy Senderowicz, Vedder Price
Jeremy Senderowicz, a member of the Investment Services Group at law firm Vedder Price, has witnessed a steady upswing in...
Graham MacKenzie, Toronto Stock Exchange
The evolution of ETFs has been a multi-decade experience for Toronto Stock Exchange says Graham MacKenzie, managing director, Exchange Traded...
Frank Koudelka, State Street Global Services
ETF data provider and ETF Express data partner, Trackinsight, has published its Global ETF Survey 2024 Report: ‘50+ Charts on...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by