Alpha Seasonal Strategy

The Alpha Seasonal Strategy is an asset allocation strategy designed for investors seeking a long-term, systematic approach to risk management. The two main objectives of this strategy are: 1) to avoid large losses, which can cost investors years of compounding; and 2) to achieve gains every year, which, over time, will be high enough to offset the effects of inflation and taxes, providing a meaningful real rate of return.

The Alpha Seasonal Strategy seeks to exploit three persistent seasonal tendencies in the stock market which have historically affected risk and return for decades. They are: 1) the consistently positive and above-average gains in the pre-election year of the four-year presidential election cycle; 2) the consistent tendency of the stock market to deliver above-average gains from November to May; and 3) the three "power periods" of the fourth quarter. Combining these three seasonal factors into one strategy allows exposure to the stock market only during very restricted time periods when Alpha believes the potential risk of loss is low.

Categorized by the four-year presidential election cycle, the investment rules and components of the strategy are:

  • Year 1, 2 and 4 - January 1 to April 30: 50% S&P 500, 25% intermediate-term bond fund, 25% short-term bond fund; May 1 to late-October: 50% intermediate-term bond fund, 50% short-term bond fund
  • Year 3 - January 1 to September 30: 50% S&P 500 / 50% NASDAQ 100
  • During the fourth quarter of every year the strategy invests in three power period trades totaling 20 days using the Russell 2000 Index leveraged by 50%. The strategy is invested in cash/money market during the fourth quarter when not invested in the three power period trades.

For more detailed information about this strategy, please click the links below to read the Alpha Seasonal Strategy brochure and fact sheet.

Click here for the strategy brochure

Click here for the strategy fact sheet