How to Implement Relative Rotation (Part 2)

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In Part 1, Relative Rotation- Unlocking the Hidden Potential, I reviewed relative-rotation strategies on pairs of securities and how understanding and assessing the relationship helps investors better manage their portfolios during bull and bear markets. In Part 2, I share valuable tools that SimpleVisor subscribers can access to improve the odds of success using a relative-rotation strategy.

SimpleVisor is an integrated investment management and research solution for seasoned and beginner "do-it-yourself" investors.

In parenthesis throughout this article, I share the location of each tool within the SimpleVisor site.

Why did I choose MGK and VYM?

In part 1, I created a simple trading strategy that used two ETFs, the mega-cap growth ETF, MGK, and VYM, the high-dividend yield ETF. I selected the pair because, at the time, their relative performance versus the S&P 500 had the most negative correlation across three different time frames. Let's revisit the two graphs below.