Follow The Fed® Standard Strategy
Follow The Fed® Standard 1970-2009:
| Table 1. Summary Return Results for Follow The Fed Standard (1970-2009). | ||||
| Follow The Fed Standard | Large Stocks[3] | Small Stocks[4] | 3Month-Tbill [6] | |
|---|---|---|---|---|
| Compound Annual Return | 13.36% | 9.87% | 9.98% | 5.97% |
| Standard Deviation of Return | 0.2058 | 0.1813 | 0.2334 | 0.0326 |
| Sharpe Ratio[1] | 0.4547 | 0.3039 | 0.2819 | - |
| Number of switches | 15 | - | - | - |
| Compound Annual Return By Decade | ||||
| 1970s | 14.92% | 5.88% | 8.77% | 6.79% |
| 1980s | 19.48% | 17.55% | 12.11% | 9.44% |
| 1990's | 18.44% | 18.21% | 12.81% | 5.02% |
| 2000's [2] | 1.55% | -0.95% | 6.35% | 2.73% |
| $10,000 becomes: | $1,507,640 | $431,871 | $449,490 | $101,588 |
| Correlation to Large Stocks[5] | 0.9128 | 1.0000 | 0.7782 | -0.0006 |
| Total Holding Period: January 1, 1970 - December 31, 2009 | ||||
[1] Calculated using the 3-Month Tbill Compound Annual Return as the Risk Free Rate
[2] January 1, 2000 - December 31, 2009
[3] Standard and Poor's - S&P 500 Total Return
[4] Proprietary Small Stock Database - Total Returns
[5] Monthly Correlation
[6] Board of Governors of the Federal Reserve System (St. Louis Fed): 3-Month Treasury Bill, Secondary Market Rate
| Table 2. Annual Performance for Follow The Fed Standard (1970-2009). | ||||
| Year | Follow The Fed Standard | Large Stocks | Small Stocks | 3Month-Tbill |
|---|---|---|---|---|
| 1970 | 3.94% | 3.94% | -17.63% | 6.89% |
| 1971 | 14.30% | 14.30% | 17.93% | 4.63% |
| 1972 | 19.00% | 19.00% | 0.24% | 4.33% |
| 1973 | -23.14% | -14.69% | -38.21% | 7.62% |
| 1974 | -27.24% | -26.47% | -27.24% | 8.52% |
| 1975 | 59.11% | 37.23% | 59.11% | 6.23% |
| 1976 | 48.39% | 23.93% | 48.60% | 5.35% |
| 1977 | 22.52% | -7.16% | 27.48% | 5.63% |
| 1978 | 24.63% | 6.57% | 24.63% | 7.76% |
| 1979 | 40.94% | 18.61% | 40.94% | 11.08% |
| 1980 | 39.99% | 32.50% | 39.99% | 12.65% |
| 1981 | 5.87% | -4.92% | -1.67% | 15.61% |
| 1982 | 21.55% | 21.55% | 27.75% | 11.69% |
| 1983 | 22.56% | 22.56% | 34.17% | 9.11% |
| 1984 | 6.27% | 6.27% | -10.42% | 10.13% |
| 1985 | 31.73% | 31.73% | 28.94% | 7.85% |
| 1986 | 18.67% | 18.67% | 3.71% | 6.23% |
| 1987 | 5.25% | 5.25% | -14.06% | 6.02% |
| 1988 | 16.61% | 16.61% | 18.54% | 6.98% |
| 1989 | 31.69% | 31.69% | 8.96% | 8.52% |
| 1990 | -3.11% | -3.11% | -27.16% | 7.88% |
| 1991 | 30.47% | 30.47% | 48.93% | 5.59% |
| 1992 | 7.62% | 7.62% | 21.05% | 3.55% |
| 1993 | 12.24% | 10.08% | 18.96% | 3.08% |
| 1994 | 1.32% | 1.32% | -5.52% | 4.38% |
| 1995 | 37.58% | 37.58% | 33.85% | 5.69% |
| 1996 | 22.96% | 22.96% | 21.32% | 5.22% |
| 1997 | 33.36% | 33.36% | 25.59% | 5.26% |
| 1998 | 28.58% | 28.58% | -1.31% | 4.89% |
| 1999 | 21.05% | 21.05% | 12.41% | 4.77% |
| 2000 | -9.10% | -9.10% | 11.80% | 6.02% |
| 2001 | -11.89% | -11.89% | 6.54% | 3.41% |
| 2002 | -22.10% | -22.10% | -14.63% | 1.62% |
| 2003 | 38.79% | 28.69% | 38.79% | 1.02% |
| 2004 | 22.65% | 10.88% | 22.65% | 1.38% |
| 2005 | 7.68% | 4.91% | 7.68% | 3.20% |
| 2006 | 18.82% | 15.79% | 15.12% | 4.84% |
| 2007 | 5.50% | 5.50% | -0.30% | 4.48% |
| 2008 | -32.55% | -37.00% | -31.08% | 1.39% |
| 2009 | 20.57% | 26.46% | 25.57% | 0.15% |
* Data for Twin Foundations™ drawn from DataStream, Frank Russell Company, Federal Reserve Bank Reports, and other proprietary databases. Data for Follow the Fed® drawn from Datastream, Standard & Poor's, Kenneth R. French PhD – Data Library, and other proprietary databases. Market indices include dividends except where noted. Actual live signals issued from ChannelCapitalResearch.com were used since 2006 (except for the Twin Foundations™ Filtered Conservative and Ultra Conservative Strategies). Live signals for the Filtered Conservative and Ultra Conservative Strategies were used since 2007.
How the Test Results Were Obtained- Twin Foundations™ simulated results using closing values for the Nasdaq 100, S&P 500, S&P 400, Russell Midcap Value and Russell 2000 Value indices. The test period was from January 1, 1996 through December 31, 2009. Dividends received were included in the overall returns except those returns related to the Nasdaq 100. Interest on cash balances was calculated using 3 month Treasury Bills unless noted otherwise. No commissions or fees were charged. Data came from industry sources, but we cannot guarantee their accuracy.
Special Bonus Report Data were obtained from Standard & Poor's and the Kenneth R. French PhD – Data Library. Where available, dividend adjusted returns were included in historical testing.
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