Although I have only finished the 33-Day updates through the end of 2011, below is a graph showing the performance of the VTSMX index and a portfolio we happened to call the Kepler. This is not the Kepler Portfolio you have seen reviewed monthly, but rather an example portfolio if one had concentrated investments in the highest ranked ETFs based on the Absolute Acceleration Percentage (AAP) values. The ETFs used to populate the real Kepler Portfolio are the same ETFs used in this back testing example.
Momentum Graph: While we expect the SHY cutoff model to show better than average results through the Great Recession (2008 and early 2009), what is different about the following graph is that it continues to gain ground on the VTSMX during the recent 5.5-year Bull Market. I’ve not seen that happen with ETFs based on prior back tests. The following graph is an advanced peek of the performance based on a set of rules I will explain later. Momentum (acceleration), when applied in its rawest form seems to work exceedingly well.