Signals Matter, LLC was founded in April 2017 by Thomas Lott and Matthew Piepenburg as an online publishing company to provide subscribers with timely financial market analysis and specific portfolio investment ideas.

No, although we do intend to launch a trading service that will automate investing for subscribers in late 2021/early 2022. For now, this Signals Matter website is provided strictly for informational and educational purposes only and is not intended as investment advice or as a recommendation to buy or sell any security. Information provided reflects our views and our research and should not be interpreted as investment advice, as an offer or solicitation, nor as a direction to purchase or sell any financial instrument. Our views concerning financial market trends and risk probabilities are based on market conditions that will fluctuate. There can be no assurance that an investor will achieve profits or avoid incurring substantial losses by investing in the Portfolio Suggestions presented by Signals Matter. Past performance of any posted Suggestion is not indicative of future results.

Market signals are all that matter when it comes to investing, to building all-weather portfolios, and to managing risk. That's why we created Storm Tracker, our mathematically-derived algorithm that informs on market risk and determines appropriate cash exposure across our portfolios.

Storm Tracker, unique in the industry, tracks the probability of stormy weather (market stress) ahead by monitoring over a hundred metrics that track GDP, Sector Trends, Leading Indicators, Yield Curves, and Déjà Vu, our in-house risk indicator that compares yield spreads with stock movements. Storm Tracker measures overall market risk on a scale of 0% (no market risk) to 100% (extreme market risk).

As broad market risk rises, cash allocations within the Conservative and Moderate Portfolios rise as well. Our Conservative Portfolio is constructed with a full Storm Tracker cash allocation (e.g., an allocation equal to current Storm Tracker risk probabilities). Our Moderate Portfolio receives a half Storm Tracker cash allocation. For the Aggressive Portfolio, there are no Storm Tracker allocations.

Constructing portfolios that hold up in all weather conditions is more than a science. It's an artful science that builds upon informed investing, market cycle discovery, meaningful diversification, risk reduction, technical analysis, and proper benchmarking – all geared to optimize return and minimize risk.

Risk tolerance is our starting point at Signals Matter. We construct portfolios around two notions of risk suitability: (a) suitable risk for the client, considering a client's financial condition and goals; and (b) suitable market risk, taking into account levels of market stability and instability.

Signals Matter draws heavily on Exchange Traded Products (ETPs) to populate its portfolios. ETPs are a category of exchange-traded investment vehicles that include two subsets, Exchange Traded Funds (ETFs) and Exchange Traded Notes (ETNs), with allocations to ETFs by far the greater of the two. The universe of ETPs provides traditional but also actively managed solutions that enable investment advisers to diversify clients away from traditional stocks and bonds during adverse market conditions for traditional investing. Signals Matter tracks over 1,000 US-domiciled, liquid ETPs. Our opportunity set includes ETPs across stocks, bonds, currencies, commodities, actively-managed, and inverse ETPs (that track the inverse of long-only indexes). Inverse ETPs provide simple, cheap, and liquid solutions to hedge (i.e., short) certain market sectors within our portfolios, enabling clients to profit should stocks fall. Unlike mutual funds, which are priced at the end of the day, ETPs are priced continuously during each market session, affording frequent and continuous price discovery.

Signals Matter portfolios are allocated to Exchange Traded Products (ETPs), namely and mostly to Exchanges Traded Funds (ETFs), but also to Exchange Traded Notes (ETNs). ETPs, like mutual funds, are types of securities that track underlying securities, an index, or other financial instruments. Unlike mutual funds, ETPs trade live on exchanges similar to stocks, meaning their prices can fluctuate from day-to-day and intraday. Comparatively, ETPs are usually a low-cost alternative to mutual funds and can contain from a few to hundreds of underlying investments. They can be benchmarked to various investments, including commodities, currencies, stocks, bonds, and others.

Alternative investing is a core strength at Signals Matter and is deployed across all Signals Matter portfolio solutions, a prime differentiator from traditional Financial Advisors (FAs) and Registered Investment Advisors (RIAs). FAs and RIAs invest primarily in stocks and bonds. Alternative investing relates to investing in anything that's not a stock or a bond, as with private equity, venture capital, real estate, hedge funds, managed futures, art and antiques, commodities, derivatives contracts, and alternative-oriented Exchange Traded Products (ETPs). Alternative investing diversifies portfolios and can be performance-enhancing during periods of systemic market change or stress.

Active portfolio management takes a hands-on approach to portfolio construction, going when and where the opportunities arise. Passive investing involves less buying and selling, often resulting in portfolios populated with traditional stocks and bonds, frequently expressed as index funds or mutual funds. While active and passive investment approaches each have a role to play, each is highly dependent upon the macro environment.

At Signals Matter, we believe that active portfolio management beats passive portfolio management hands down during periods of extreme market stress, at market tops, and during changing interest rate regimes. For us, meaningful diversification is not about growth vs. value, or high-cap vs. low-cap, or stocks vs. bonds. It's about allocating smartly across less-correlated asset classes that include real estate, currencies, commodities, precious metals, sector-focused funds, countries, and other alternative choices, including inverse investments that make money when stocks and bonds fall.

Actively managed portfolio components generally zig when the markets zag, reducing portfolio volatility, thus providing a calmer ride with the potential to compound to a higher place over time.

At Signals Matter, we believe that the key to any great portfolio is the investments it holds and the macro-environment surrounding it. Interest rates are a core variable that significantly impacts portfolio returns across traditional stock and bond investing. Having fallen for a decade, interest rates could easily make the turn as the pandemic lessons and inflation returns.

Given unprecedented levels of post-2008 central bank intervention in the public markets by deploying trillions of printed dollars (i.e., Quantitative Easing or QE), used to facilitate the purchase of U.S. Treasuries and other critical U.S. debt instruments, the Federal Reserve has been recently able to essentially "buy" large swaths of the credit/bond market, keeping interest rates (and interest rate risk) low.

In our view, the risk of rising interest rates is a clear and present danger to traditional investing. Just as falling interest rates have favored both stocks and bonds for the last decade, as interest rates rise, we believe stocks and bonds could together be adversely impacted, clearing the runway for actively-managed, alternative investing solutions like ours. As interest rates rise, bonds fall, no longer providing a reliable or suitable portfolio hedge; corporate earnings fall as well, as interest rates take a bigger bite out of profits.

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