The Tide Traders Model

What it is (and isn’t)

The Tide Traders Model is an educational framework for investing systematically. It is not a guaranteed return, a get rich quick scheme, or personalized financial advice. It’s a disciplined set of rules we designed to stay invested, diversified, and unemotional through full market cycles, the same rules applied the same way, every time.

To go a little deeper, we frequently refer to the model as TTP, short for the Tide Traders Portfolio. TTP, at a high level, is an investment style called “trend-following” and seeks to achieve better risk-adjusted returns than a traditional passive 60/40 portfolio. We’ve designed the model to allocate heavily to equities when the market is signaling a healthy environment, and to downsize positions when the market is signaling a less than healthy environment. All of it done systematically.

Markets tend to trend. Nearly 100 years of academic data supports trend following as a rare source of consistent alpha over the decades. We utilize a volatility adjusted moving average as our core signal with a binary output, Bullish or Bearish. We then layer an ensemble of various other signals to determine the strength and quality of that bullish signal to select the top trending assets at the beginning of each month. Once we’ve determined the monthly allocation, we then only adjust allocation if the core regime changes, an allocated asset’s price falls below its trend signal for at least 3 days, or a volatility override forces an asset signal = Bearish.

We allocate to 3 different asset classes in varying percentages depending on the market regime.

Eligible Assets Used At Times In The Model

1) Equity: Leveraged SPY, Leveraged QQQ, Value, Quality, Momentum, Small Cap, International, Emerging Markets, Low Vol Developed, & Low Vol Emerging Markets

2) Fixed Income: 1-3 Month Treasuries, Emerging Markets, TIPS, 20+ Yr Treasuries

3) Alternatives: Gold, Bitcoin, Commodities, Managed Futures, Dollar

The result is a back-tested model that has performed well, but that we also believe is well positioned to adapt to numerous market environments in the future.

Backtested, hypothetical performance, net of estimated costs; benchmark shown frictionless. Past performance does not guarantee future results. Educational only, not investment advice. See our disclosures.