Markets reward leadership. Each week we rank every sector, the industries inside them and the largest companies inside those, so our portfolios lean toward strength and away from areas that are losing it.
Every weekend, Breakaway Financial Group runs a top-down screen that answers one question: where is the market's strength right now? It works from the broad market down to individual companies using relative strength, a measure of how an investment is doing compared with the market around it. The results guide our monthly portfolio reviews.
Relative strength compares an investment's performance with a benchmark over the same period. An investment that rises more than the market, or falls less than the market in a down period, shows positive relative strength.
It answers a different question than "Is this going up?" It asks, "Is this doing better than the alternatives?" That makes it a useful way to see where investors are putting money to work, and where they are pulling it out.
The screen narrows from the whole market to a short list of leaders in three steps.
The result is a weekly list of leaders and laggards at every level.
The screen does not trade anything by itself. It tells your advisor where to look.
After the last Friday of each month, each of our model portfolios applies its own written rules, and the screen's findings feed those rules. Your advisor then compares the rules' targets with what you actually hold, decides what to trade, and records the reason for any departure. See our model portfolios
Leadership changes. When a company or area that was leading drops below its long-term trend and falls behind the market, the rules in several of our portfolios reduce it in steps and move the money to the next name in line. That decision is set out in writing before it is needed. How we manage risk
No. Short-term spikes don't qualify. The screen looks at several time periods, requires a healthy long-term trend, and our rules trim positions once leadership fades.
Relative strength is one form of momentum: it favors what has been doing better than the market. We use it as one input to written rules and an advisor's review, not as an automatic trading signal.
No. It produces a ranked list. Your advisor reviews each portfolio's rules once a month and decides what to trade.
They change often, and naming them on a website could read as a recommendation.
Following leadership is one part of a process that starts with your plan. Let us show you how it would shape a portfolio built for your goals.
Book a planning conversationBack to our investment processThis is educational content, not personalized financial or tax advice, and not a recommendation to buy or sell any security or to adopt any investment strategy. Advisory services are offered through Savvy Advisors, Inc., an SEC-registered investment adviser; tax and business services are provided by Breakaway Financial Group. Investing involves risk, including loss of principal. Rules-based strategies may not perform as intended and can lag sudden market moves. Model portfolios are adjusted by the advisor for each client; individual results will differ. Past performance and past relative strength are not indicative of future results. Crypto assets are highly volatile and may not be suitable for all investors.