Getting Started

At FormulaFolios we believe every client deserves a customized portfolio specifically designed for their unique investment goals. We start by partnering with top independent financial advisors throughout the United States, and work with them through a defined process to ensure each client is delivered a custom investment proposal.

To receive your customized FormulaFolios Investment Proposal, please contact your financial advisor, or use our contact form to be referred to an approved advisor in your area.

FAQs

If there’s something you’d like to know about FormulaFolios that is not on this list, please feel welcome to email info@formulafolios.com. We’ll compile the most common questions and add them to the list.

1. What Are FormulaFolios?

FormulaFolios were created in late 2004 by current Chief Investment Strategist Jason Wenk. He was unsatisfied with the fact that nearly 80% of all money managers failed to outperform their benchmarks and often produced less than desirable risk-adjusted returns. This in turn created a quandary for his clients: How were they going to preserve their assets regardless of the climate of the market? The research for a new investment strategy then commenced and has been an ongoing process.

As a result, FormulaFolios is an investment strategy unlike any other in the market today and embodies the idea of being simple, yet sophisticated. Simple because of the concepts it is based on, yet sophisticated because of its advanced systematic mechanical approach to quantitative analysis.

Today, FormulaFolios continues its research with the same dedication to the preservation and creation of wealth for its clients.

2. How Do FormulaFolios Work?

FormulaFolios are privately managed investment accounts powered by multi-factor quantitative investment strategies. By using a rules-based, process driven model, emotions are removed from the investment process, thus increasing the statistical probability of success. FormulaFolios are comprised of individual equities, exchange traded funds, mutual funds and cash equivalents. FormulaFolio Investments’ proprietary systematic mechanical approach to selecting positions is designed to only select positions with an above average probability of returns based on both fundamental and technical indicators. No outside leverage or short selling is used. The principle objective of the portfolio is to reduce equity market risk and increase portfolio returns.

3. Are FormulaFolios Customizable for Socially Conscious Investors?

Yes. If you have an objection to a certain social sector or even a particular stock, they can be excluded from your allocation with ease.

4. Are FormulaFolios Suitable for Taxable Accounts?

Yes. Although though short-term capital gains rates will apply in non-qualified taxable accounts, FormulaFolios are private accounts so there will be no embedded gains, as there are in the case of many mutual funds. We can also employ particular strategies that are designed to be more tax sensitive and have a lower turnover ratio. Ultimately, our goal is to constantly outperform market averages on a risk-adjusted return basis.

5. Are Stop/Loss Orders Utilized?

No, Stop/Loss Orders are not used. When the research was being developed for our strategies, stop/losses were looked at as a possible tool. What we found is that it is nearly impossible to use them with any degree of accuracy and it increased the frequency of trades while providing no real increase in return. Therefore, we use two elements to provide protection: An economic overlay, which we call Recession Probability Analytics (RPA) and WealthGuard, an exclusive portfolio monitoring software. To learn more about WealthGuard visit www.WealthGuard.me.

6. Are There Ticket Charges or Commissions For Using FormulaFolios?

Typically there are no ticket charges, per share fee charges, or additional trading fees. The price we give is inclusive for the money management portion.  There will be separate charges for wire transfers or other services. (Please see fee agreement.) Each custodian utilized by FormulaFolios is different, so please speak with your financial advisor for a complete description of possible charges issued by the custodian.

7. Do FormulaFolios Ever Move 100% to Cash?

In theory, it is possible that none of the positions would qualify and we could sit 100% cash for a short duration of time.  However, there is very, very small probability of this ever occurring. A more likely scenario is that we could hold ETF positions that would hedge our investment.

8. How Liquid Is A FormulaFolio Account?

Providing markets are open, FormulaFolio accounts can be liquidated in one business day.

9. How Many Strategies Are There?

There are seven separate and unique investment strategies used in the composition of FormulaFolios; this reduces the possibility of strategy failure and increases the stability of expected returns. The ultimate goal of FormulaFolios is to outperform market averages on a risk adjusted return basis. 4 of the strategies are proprietary to FormulaFolios and 3 are managed by carefully chosen third party managers. These 7 strategies can be blended in hundreds of different ways to create truly custom portfolios for each unique client.

10. How Often Will I Receive Performance Updates?

Mailed performance updates are issued every quarter, along with a full, in-depth Market Commentary providing insight into various foreign and domestic markets. You will be able to check the performance of any account 24/7 by accessing your account at FormulaFolios.com, or you can utilize our new Apple and Android applications designed for your smart phone or iPad. We also send out weekly email updates to make tracking your accounts both timely and simple.