Stoken Tactical Adaptive Asset Allocation

Set by the Portfolio Manager

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Manager Portfolios

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0.25%-0.75% annual; IA retains 0.25%, remainder paid to the Portfolio Manager; fee negotiated between IA and the manager

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Equity securities (exchange-listed, certain OTC, ADRs) and ETFs; Portfolio Managers cannot use leverage/margin

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Most $500-$50,000; majority $10,000 and below

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To be selected, managers are screened (e.g. AUM, own money in the strategy), fill in a questionnaire on portfolio construction, risk control and strategy guidelines, share historical trade data, and pass a live test period during which clients cannot invest. Managers license their trade data and have no discretion over client accounts. IA receives no compensation from managers and does not pay them for referrals.

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Risk score 1-5 assigned by IA; reevaluated at least annually

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Not available (TLH only for the Asset Allocation Portfolio)

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STA employs an enhanced version of the Active Combined Asset strategy outlined in Dick Stoken’s book, Survival of the Fittest for Investors. This tactical asset allocation strategy is designed to perform well during all market and geopolitical environments, and to protect investors from significant capital depletion during sustained bear markets. STA’s goal is to preserve and grow capital by outperforming the S&P 500 over complete market cycles, while producing lower-than-market risk. Instead of traditional buy-and-hold portfolios with set allocations, STA attempts to adapt and react to markets as they evolve. The strategy is designed to recognize changing market conditions early, find trends as they develop, and react by shifting asset allocations to be as prepared as possible for what lies ahead.

Stoken Asset Management is an investment advisor providing quantitative asset management services to individuals and institutions. The firm believes that markets are difficult, if not impossible, to predict and that diversification is no longer enough to manage portfolio risk. Our view is that asset classes should be treated independently, allowing for material shifts in asset allocation as market patterns emerge. Stoken Asset Management was founded in 2013 by Deidre Stoken McClurg. She brings over 20 years of finance and investment experience to the firm. Prior to founding the firm, Deidre worked for JPMorgan’s Private Bank and William O’Neil & Co. Deidre is a Certified Financial Planner and Certified Public Accountant. She earned a BA from the University of Southern California and an MBA from Northwestern University’s Kellogg School of Management. Get invested STEP 1 Fill out the application It's easy and only takes a few minutes. STEP 2 Explore our portfolios Or choose one based on your preferences STEP 3 Make your 1 st investment Our technology ensures it is suited for you Sign up today! Disclosures Past performance is no guarantee of future results, and all investments, including those in this portfolio, involve the risk of loss, including loss of principal and a reduction in earnings. This portfolio was launched on Interactive Advisors on December 26, 2018, when clients were able to start investing in it. All performance information on this page is actual performance of the Portfolio Manager’s account and presented “net of fees”. The actual performance chart is provided for informational purposes only, and should not be used as the basis for making an investment decision. Actual client returns will differ . All Portfolio Manager information including personal data, profiles, and strategies has been provided by the Portfolio Manager. Interactive Advisors makes no representation or warranty of its accuracy, completeness or relevance and it does not represent the opinions of Interactive Advisors. All performance information on this page is based on the performance of the Portfolio Manager’s account, using the manager’s own funds. Performance of the Portfolio Manager's account is calculated by Interactive Advisors on a daily time-weighted basis, including cash, dividends and earnings distributions and reflects the deduction of broker commissions (when commissions were charged). Manager returns include trades and positions that fail Interactive Advisors' trading rules, as a result, actual client returns will differ. Interactive Advisors’ advisory fees are simulated and applied retroactively to present the portfolio return “net-of-fees”. In addition to Interactive Advisors’ management fees, clients will also be charged management fees and other expenses (custodian fees, brokerage commissions, and legal and accounting fees) by ETF issuers if the portfolio contains ETFs.

Cautious capital growth with a lower risk than broad equity markets. Investing mostly in ETFs, funds and large-cap equities and prepared to accept some level of fluctuation in portfolio value.

STA is a long-only, tactical strategy that uses ETFs to gain exposures to four distinct asset classes: Equities, Real Estate, Gold and US Treasuries (long and short duration). Allocations to each risky asset class range from 0% to 60%, depending on their performance and relative strength, as determined by a quantitative, model-based algorithm. The algorithm uses price channel breakouts to choose between pairs of opposing risk and defensive asset classes. Core ETFs that may be used in the strategy include: SPY, VNQ, GLD, SHY, IEI, EGG, TLT, and TIP. Additional ETFs that represent up-and-coming global markets, such as China, will be considered based on currency, political and systemic risk levels. Marginal positions in commodity and/or smart beta ETFs may be used to generate additional alpha. The strategy trades less than five times per year on average.

STA provides low correlation to traditional investment strategies and offers returns independent of market direction. Decisions are made using a systematic model-based approach and are not based on current market noise, emotions or instincts to follow the crowd. STA has the flexibility to move into mostly defensive assets (bond ETFs) when risk is perceived to be at its highest, enabling the portfolio to avoid significant losses. STA utilizes low-fee ETFs to access asset classes, with the goal of minimizing investment costs and maximizing returns. The investment strategy is grounded in tested theory and real-world experience, with proven research and analytical rigor forming the foundation of our approach. We practice disciplined investment and portfolio implementation, applying a consistent, unemotional and systematic process.

Free markets use the same algorithm as evolution. They can be viewed as complex adaptive systems that are governed by trends. Using complex adaptive systems as a framework, STA utilizes agent-based modeling to find market-based patterns. The strategy uses three key principles of complex adaptive systems: Variation – By including four diverse asset classes, three that are risky and one that is defensive, to give investors a greater chance of having an asset class that “fits” the then-current environment Fluctuation – By applying an algorithm designed to best protect investors from large capital depletions during sustained bear markets by defensively moving out of risky assets Punctuated Equilibrium – By using a methodology to take advantage of profit opportunities during periods of relative order and to gainfully navigate through periods of extreme chaos and disruption

Long positions in risk assets are sold according to STA’s algorithm, signaled when an index is trading below its bottom channel threshold. The portfolio is rebalanced during allocation changes.