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Yes, the platform has undergone extensive and rigorous testing using over 30 years of historical market data. We confidently conclude that the accuracy in displayed hypothetical performances sourced from the SHEP platform has undergone a thorough examination by a highly credible third-party resource; concluding that the SHEP Model is logically constructed, internally consistent, and is, in all material respects, arithmetically accurate in terms of its formulae, algorithms, calculations and performance results.
We understand and embrace our duty as a fiduciary. With great diligence, we evaluated SHEP’s responses across many market conditions using both in-sample and out-of-sample data.
In-sample testing allowed us to “train” our SHEP Models to optimize their ability to identifying patterns and relationships within the historical data. This ensures that SHEP Models performed well under “known conditions.”
Out-of-sample testing, most critically, enables us to evaluate the Model’s performance with “unseen data.” By this measure, we are able to realistically conclude, by the measure of SHEP’s robust and predictive nature in real-world scenarios, how SHEP Models are capable of delivering in the future.
Out-of-sample testing is important because it tests the model’s ability to generalize how it should respond to new unseen future data. This step helps us ensure that we have avoided “overfitting.”
Overfitting is an undesirable machine learning behavior that can occur when the use of machine learning models fit too closely to its training data. Through out-of-sample testing, we can affirm if our SHEP Models aren’t responding as intended when faced with new data (the future).
Conducting these tests on our Models helps to ensure our SHEP strategies are not just tailored to past data but are likely to make accurate predictions in future market conditions as well.
DEFINITION
Employs the use of tactical shifts in asset allocation to reduce risks (not derivatives). Seeks to detect and respond to risks ahead of market downturns.
SELL ANALYTICS
Measures how well an investment strategy performs relative to a benchmark during periods when the benchmark is falling. A ratio of less than 100 indicates that the strategy has outperformed the benchmark.
DEFINITION
The Edge continuously monitors the ever-changing market conditions to discern timely reentries at collectively lower buy-backs than previous sells.
BUY-BACK ANALYTICS
Measures how well an investment strategy performs relative to a benchmark during periods when the benchmark is rising. A ratio of more than 100 indicates that the strategy has outperformed the benchmark.
DEFINITION
The compounding effect is derived from accumulating new shares with each successful risk mitigation trade cycle.
OUTCOME ANALYTICS
Measures how well an investment strategy performs relative to a benchmark during both up and down markets. A ratio of 1.0 indicates return asymmetry, > 1.0 is positive return asymmetry, and <1.0 signifies negative return asymmetry.
*Illustration for Up-Market and Down-Market Capture Ratios are by Period: This illustration calculates the differences in total return of SHEP and the Buy-Hold benchmark during up and down-market periods over the past 10 years dated as of 9/30/24:
Note: The performance data represented herein constitute hypothetical returns based on back-tested data over a defined period of past financial and economic data. The data does not represent the actual performance of any account or portfolio. Hypothetical performance information is dependent upon the limited information considered in preparing these model returns. Although Stone Wall Financial has attempted to consider all relevant data in developing the models presented herein, the models cannot take into account unanticipated events that may occur in the future, which events could have a material impact on any model’s performance. You should therefore not rely on hypothetical information in making future investment decisions. The model performance information provided herein is subject to change and presented for informational purposes only.
To see SHEP’S DOWN-MARKET ANALYSIS spanning the past 10 years and how the SHEP model: