Welcome to GoSector, an investment service that helps you outperform the market. We utilize top-down analysis of the equity market and sectors using adaptive quantitative methods, mainly focusing on a combination of sector rotation and market timing models. The strategy we employ was rigorously tested and engineered to outperform the stock market on an absolute and risk-adjusted basis.
Sectors historically follow market patterns more consistently than single assets such as stocks, commodities, currencies etc. This is the reason why many sector rotation strategies have a long history of outperforming the market. Our investment strategy algorithm identifies the three sectors with favorable trends on a weekly basis, and adjusts the portfolio accordingly. On average, one sector is swapped in/out of the portfolio every two months.
The sector rotation model is designed to capitalize on risk-adjusted momentum and trend consistency. Generally, business activity changes during different phases of the business cycle for companies translate to more revenue, which results in changing profitability of sectors. This is correlated with factors such as seasons, holidays, market movement and monetary policy. With this logic, one can use the right model to find top-performing sectors; however, it is important to understand that the market’s cyclical model (used by many sector rotation strategies) gives the theoretical explanation of the market environment that drives long trends in sectors, but lacks the flexibility and accuracy required for real investing.
GoSector is focused on finding the leading sectors rather than pinpointing the phase of the market at a given point. The long-term market timing model is expressed as our Alpha indicator; its goal is to reduce portfolio risk by allocating to low-risk assets, such as bonds, during bear equity market conditions. Also included, is a bonus short term indicator which represents the market outlook for the upcoming week.
Sector ETFs offer low trading costs combined with a low spread. This and the low trade frequency make GoSector extremely easy and low-cost to implement, while still remaining very efficient and profitable.