The Medford Financial Group, LLC & MFG Investments, LLC is proud to offer a Sector Rotation Strategy. The MFG Sector Rotation Strategy involves a disciplined approach to investing and managing risk for our valued clientele. It combines both fundamental and technical analysis in effort to stack the odds in our favor. Fundamental analysis tells us what to buy and technical analysis tells us when to buy, so we are concentrating on buying and selling fundamentally sound investments at the most advantageous times. To do so, we rotate in and out of sectors based on their position in the market. Our goal is to capitalize on future trends in the market and mitigate the damage from severe market downturns. In other words, we are looking to increase your returns while managing your risk.

Methodology
The Medford Financial Group has championed the Point & Figure methodology and it is used extensively in the Sector Rotation Strategy. Point and Figure Charts provide a means to obtain valuable information about the markets, sectors and individual securities. The benefits of the Point & Figure Methodology include:

• Identifies whether supply or demand is in control
• It should enable the investor to stay on a winner while it is winning and get off a loser quickly
• Formations, patterns and signals that can be recognized and interpreted, and tend to repeat themselves
• Trends are readily identified and trend-lines can be drawn with amazing ease.
• Valid targets can be established
• The method is dynamic
• The fixed interval of plotting may be made to fit whatever you want to chart - stocks, bonds, or investments.
• It ignores the static time factor, the confusing volume indications, and irrelevant minor fluctuations

Game Plan
Investment decisions are based on a five-step game plan.

1. Market analysis
2. Sector analysis
3. Fundamental analysis
4. Technical research
5. Risk management

Our strategy is a top to bottom approach that looks to stack as many factors as possible in our favor. Let's look at how this strategy comes together.

Market Analysis
Most investors, as well as their advisors, spend the majority of their time on stock evaluation and neglect to consider the impact of market and sector forces. In other words, they ignore areas where the greatest amount of risk lies. Market and sector forces together typically cause 80% of the price movement in a stock. Company fundamentals account for less than 20% of a stock’s price movement. This is why we see a company’s stock price move independently of its fundamentals.

Our methodology begins with thorough research on general market conditions to determine whether prices are rising or falling overall. This is the most important step in the process. The primary indicator used in our market analysis is the NYSE Bullish Percent. The NYSE is simply a tool to measure the risk in the overall market, yet it provides valuable information on the direction or trend of the market. It tells us whether we should be on offense and aggressively investing, or whether we should be thinking defense and wealth preservation.

Sector Analysis
The next step in the process includes an analysis of over 40 sectors to see which present the greatest opportunity for investing and wealth accumulation. A similar method is used in which we monitor the Bullish Percent of each sector to determine those sectors that present an offensive opportunity. A sector bell curve is developed to help us visualize market risk among the various sectors. In addition, various other indicators including, relative strength and 50 and 200 day moving averages are employed in our sector analysis. The ideal situation for a sector is as follows:

• Strong Relative Strength
• Bullish Percent chart with demand in control
• Bullish Percent chart that is not oversold

Through our analysis, we are able to identify the most promising sectors for our investors. Offensive sectors with good field position are over-weighted in our portfolio while defensive sectors are under-weighted.

Fundamental Analysis
Although we often concentrate our investments in sector funds that are traded on the exchanges, we occasionally trade in stocks, EFT funds. Such companies are discovered through fundamental and technical analysis of companies in our favored sectors. Once we’ve determined which sectors to concentrate on, we research companies within these sectors. Our fundamental analysis employs trend analysis and benchmarking against similar competitors. We study company management, earnings quality and stability, P/E ratios, product acceptance, and financial risk. Because fundamentals are sometimes misleading, we combine the above analysis with technical analysis for the most promising companies.

Technical Research
The most fundamental companies in our favored sectors undergo a thorough technical analysis to search for any outstanding investment opportunities. Technical analysis allows us to:

• Identify trends in the company’s stock price
• Determine the company’s relative strength in relation to the market and sector
• Recognize momentum
• Forecast prices

The indicators used in addition to the Point & Figure price chart include charts for relative strength, 50 and 200 day moving averages, high/low price, weekly momentum, and option outlook. This is the final step in our investment selection when investing in individual companies.

Risk Management
Our goal is to have as many factors in our favor in order to increase the probability of success. There are times when most of our factors point toward a particular action, but a few may be pointing in a different direction. This is often the case in a down or stagnant market. Often, it is important to hedge our risk or insure ourselves. We do so through various means. We utilize tools such as options when appropriate or we simply convert some of our portfolio to cash and await better investment opportunities. Under these circumstances, we are assuming a defensive or wealth preservation posture. Think of how many investors wish they had employed such a strategy over the last few years. They would still have much of their investment portfolio intact and they would be ready to benefit from the impending expansion that always follows a bear market.

Summary
Through our analysis of the market, we can determine whether we should be in a wealth accumulation or wealth preservation posture. If the market indicates wealth accumulation, then we determine which sectors present the greatest opportunities. We then invest in those particular sectors using electronically traded sector funds. By using sector funds, we are avoiding much of the risk of individual companies and therefore reducing the risk through diversification. We also fundamentally and technically evaluate companies within these sectors in order to identify any outstanding opportunities. Finally, during times of uncertainty, we employ various risk management tools to preserve our capital.

The MFG Sector Rotation Strategy represents an opportunity to participate in a managed account that employs sound investment strategies and superior risk management. You will no longer be exposed to the buy and hold myth that has led to the incredible investment losses in resent years. Instead, you will have the opportunity to aggressively capitalize on bull markets and avoid the typical excessive losses of bear markets.

Securities Offered through Securities Service Network, Inc Member FINRA / SIPC