Market Protection
- Consistent financial growth is dependent on a clear understanding of the affects of diversification on a portfolio’s bottom line.
- During low economic growth the benefits of diversification are all too painfully clear but when the good times roll around, as they always do, the benefits of diversification are often overlooked.
- The bar graphs and figures below illustrate the overall benefits to an investor’s portfolio performance with 25% allocated to Tramita Funds as compared to a traditional stock and bond portfolio.
- The distribution of returns for the portfolio with a 25% allocation to Tramita Funds is shifted significantly to the right fewer losing months and 0.78% smaller equal to an annual rate of 9.4%.
- In addition, the frequency of losing months is 23% as compared to 47% and the averaged profit for all months is 3.9% higher annually.
| Stats Summary | |
| Average Return, % | 71.9 |
| Average Drawdown, % | 1.2 |
| Average Drawdown Duration (Months) | 2 |
Future Performance
The blanket warning about the uncertainty of basing future prospects on past performance coming from most funds is just not good enough for Tramita. We strongly believe that the measurement of future performance is the most critical part of an investor’s strategy and must be considered before investing a penny. The trade history of our portfolios itemizes over a thousand trades, which allows for estimates on confidence levels.
In the table below, upper and lower confidence limits are shown in brackets. The figure to the right shows a compounded equity curve for Tramita Funds investment with brackets representing upper and lower confidence limits. Respectable performance even at the lower confidence limit indicates that there is a high probability of investment success, though there is no guarantee of such success.
Most fund managers cannot or will not provide this information to clients and great care must be taken in this situation to make sure any favorable historical results are not just lucky spikes within a very diffuse probability distribution that may even extend to negative territory.
| Performance metric | Lower Confidence | Upper Confidence Limit |
| Average simple annual return, % | 39.2 | 178.2 |
| Annualized standard deviation, % | 19.5 | 8.9 |
| Max drawdown magnitude (100 years), % | 25.0 | 2.0 |
| Longest drawdown (100 years), months | 78 | 19 |
95% Confidence Limits of Projected Performance
-0.50
+0.29