Haugen Custom Financial Systems has, over the years, investigated many leads regarding new signals or factors to improve power in our model. Most of these leads proved to be disappointing. Since our clients value stability in our process, we have rejected leads that only marginally improved predictive power in our model.

Recently, however, we discovered a more powerful statistical approach for estimating the payoffs to the factors in our model. The increase in predictive power was so dramatic, that we were able to remove six of the less stable technical factors from the model while maintaining significant superiority in predictive power. The result is a more powerful model with higher information ratios, lower probability of under-performance, and lower portfolio turnover.

Our discovery was not the result of testing over numerous approaches for payoff estimation. Once the approach was discovered in the United States , we went out of sample and found that it also improved the results in Europe and Japan . We also took the approach to several different time periods in the U.S. , and we found that it significantly improved results then as well.

We continue to produce expected returns under our standard process; however, we are pleased to offer the Enhanced Slow Burning Model to those who may be interested. For details on pricing and service, please call 949-509-9800 or 970-259-9176.