Alt Income Fund 2 (Pinnacle)

The Pinnacle strategy is a conservative, non-directional, income generating, all weather strategy that is optimized for the following conditions:

  • It’s optimized for the “New Political Era” – This strategy can handle the volatility that can come out of Washington DC, which can sell-off stocks at any time
  • A US economy that has been slowing, but with a Fed that is now on an interest rate reduction path that has reduced market volatility and put a floor under the market
  • A yield curve that is flat and recently inverted – thus the bond market is sending a message that the economy is expected to slow
  • Slowing corporate earnings that contracted -0.4% in Q119 and -0.8% in Q219
  • A slightly expensive market trading at 17.0x forward S&P500 earnings
  • A sideways and choppy market that has been difficult to generate consistent positive gains using stocks, ETFs or indexes
    • Most major indices have been trading sideways, choppy and range-bound since Jan 2018
    • Buying stocks or ETFs takes a lot of experience in this market – it’s easy to get chopped up

Characteristics of the non-directional Pinnacle Strategy:

  • Pinnacle is a non-directional, all-weather strategy that can generate positive monthly returns in upward trending, downward trending, or sideways and choppy markets.
  • We hold maximum of 3 to 4 positions at any one time representing a 30% to 40% exposure of the portfolio
    • Each position represents 10% of the portfolio and is open for 2 weeks
    • We hold sufficient cash in the accounts to make trade adjustments when volatility unexpectedly rises
  • This strategy is conservative by construction, which allows us to sleep well at night because we have a low level of exposure, but we’re still able to make solid monthly gains
  • Targeted returns for the total portfolio are 2.5% to 5.0% per month after commissions
  • Capital preservation and safety are a top priority
  • We have 16 years of experience in trading this strategy