Investment Selection Paradigm (ISP): Strategy, Method and Logic

At Regen Associates, our long-term studies have documented that mutual fund past performance is capable of consistently beating the market, as measured by Standard & Poor's 500 Stock Index.

Why is breaking the S&P 500 sound barrier so important anyway?

Because it would enable average fund investors to boost annual returns of 4+%, over many decades based on DALBAR'S research, to the 10 -11% level of the S&P 500 returns of the last 20 years.

What accounts for such a return disparity?

It's simple: a total fund population contains on the average 3-4 times as many "mediocre" than "superior" performing funds, so there is a 3-4 times greater probability of selecting more "mediocre" than "superior" funds. This results in the dragging down of returns to about 40% of the S&P 500 over time.

Is there any way to prevent this, and allow investors to achieve the returns of the S&P 500?

Definitely. While skeptics point to the challenges of data overload, noise and bias; and the industry itself may be wary of ideas that buck convention; experts at Regen Associates have come up with a thinking man's strategy. We call it the Investment Selection Paradigm (ISP). Applying mathematics and logic, through a combination of unique steps, we have been able to identify and then discard "mediocre" performing funds (those that do not beat the S&P 500) from a population. The remaining funds can then be designated as "superior" performing funds (those that beat the S&P 500). The outcome: previously unobtainable results.

The implications are important for investors today. The industry-wide application of our ISP method to the 3-4 trillion USD (half the open-end fund market) now invested at an average of 4+%, would enable about one hundred million more investors to achieve higher returns and enjoy retirement than would otherwise be able to do so.

Don't believe it's possible? Our findings are supported by a .96 Pearson Correlation between our ISP and the S&P 500 - using tens of millions of data cells over more than a decade.

What we have here is significant. At Regen Associates, our Investment Selection Paradigm successfully uses past performance to overcome the obstacles pointed to by industry naysayers. The result is a uniquely bold, accurate, and reliable analytic method that predicts and ranks "superior" performing funds relative to the S&P 500. This once distant dream is now a reality.