Summary Technical analysis used to be a niche field of study. Now, all you need is to visit any stock market website, enter a ticker, and with the click of a mouse you can access all kinds of fun indicators. Study after study shows that most who rely on charts end up overtrading their accounts based on subjective analysis, massively underperforming over long periods of time. “Who are you going to believe, me or your lying eyes?” – Groucho Marx Pop quiz: what is the level of the Dow Jones Industrial Average with dividends re-invested? Anyone remember chartbooks? Back in the day, chart books would costs thousands of dollar to be delivered to your front door, showing monthly or quarterly bar data. Trend lines would be drawn, and oscillators followed to help understand the potential for a trend to continue, or reverse. Technical analysis used to be a niche field of study. People would actually have to create candlestick charts by hand, draw in moving averages, and pull out rulers to form support and resistance lines. Not so anymore. Now, all you need is to visit any stock market website, enter a ticker, and with the click of a mouse you can access all kinds of fun indicators. Rarely are such indicators ever back tested to check for historical validity, but because human minds love to find patterns to remove uncertainty, even the most novice of traders or investors believes they are experts in a field that was once dominated by only a select few professionals. More so than that, most will look at a chart and immediately assume that something has done well or poorly based purely on that price data. Never mind the fact that study after study shows that most who rely on charts end up overtrading their accounts based on subjective analysis, massively underperforming over long periods of time. There is an even bigger problem with using your lying eyes to make a judgment call or say with conviction what the performance of a particular investment is. Nearly all charts show price-only data and are ex-dividend/distribution. If you happen to look at certain bond fund ETFs such as the iShares Barclays 20+ Year Bond Fund ETF (NYSEARCA: TLT ) or dividend focused equity funds such as the iShares DJ Select Dividend Index Fund (NYSEARCA: DVY ), you’re basis for determining how those funds performed if looking purely at a chart would provide a completely inaccurate understanding of historical returns. What you are seeing in a chart does not include what is a major component of total returns and actual wealth generation. Yet, with conviction most will look at a chart and proclaim that the performance of this or that investment or strategy (regardless of selecting an appropriate benchmark) is lackluster, completely ignoring any dividends and distributions that investment has paid out. Why do I mention this? Because it is a pervasive problem I find in the investment industry. Mutual funds, for many reasons, must distribute at the end of the year the sum total of all dividends and net trading gains (if any) made throughout the year. This tends to result in a lump-sum payment distributed at the end of the year assuming there is no tax loss carry forward to work off of. A look at a chart would show a gap down (as that end of year distribution is made), seemingly making the investment “collapse at the end of the year” resulting in a loss, which in reality it actually isn’t. It’s simply a price adjustment to a distribution. Yet, with conviction, people consider performance to be what they see in a chart which does NOT include that distribution adjustment, and as such does not show total return. Performance does not come from price alone, but from price + dividends/distributions. Charts only show price. Funds which focus on short-term anomalies such as our alternative Morningstar 4 Star overall rated ATAC Inflation Rotation Fund (MUTF: ATACX ) (rating as of 9/30/15 among 234 Tactical Allocation Funds derived from a weighted average of the fund’s 3-year risk-adjusted return measures) has tended to have such distributions over time. Looking at a price chart alone would make someone think the performance of such funds has been unappealing. Performance, however, would be inaccurately calculated from ex-dividend/distribution price charts alone. Oh, and the answer to that question about what the level of the Dow Jones Industrial Average is going back to inception in 1896 with dividends re-invested? It’s estimated to be well north of 1.7 million, as opposed to Dow 17-18,000ish today. Performance isn’t price, unless price is updated to reflect those very real payments. We document this in the summary version of our award winning papers (click here to download), and I think every now and then it’s good to provide a healthy reminder in a world of free charts. – Michael A. Gayed, CFA Opinions expressed are those of the author and are subject to change, are not intended to be a forecast of future events, a guarantee of future results, nor investment advice. The Fund’s investment objectives, risks, charges, expenses and other information are described in the statutory or summary prospectus, which must be read and considered carefully before investing. You may download the statutory or summary prospectus or obtain a hard copy by calling 855-ATACFUND or visiting atacfund.com . Please read the Prospectuses carefully before you invest. For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating™ (based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a fund’s monthly performance including the effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) The ATAC Inflation Rotation Fund was rated against the following numbers of U.S.-domiciled Tactical Allocation funds over the following time periods: 234 funds in the last three years for the period ending 9/30/15. With respect to these Tactical Allocation funds, ATAC Inflation Rotation Fund received a Morningstar Rating of 4 stars for the three-year period. Past performance is no guarantee of future results. ©2015 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Mutual fund investing involves risk. Principal loss is possible. Because the Funds invest primarily in ETFs, they may invest a greater percentage of its assets in the securities of a single issuer and therefore is considered non-diversified. If a Fund invests a greater percentage of its assets in the securities of a single issuer, its value may decline to a greater degree than if the fund held were a more diversified mutual fund. The Funds are expected to have a high portfolio turnover ratio which has the potential to result in the realization by the Fund and distribution to shareholders of a greater amount of capital gains. This means that investors will be likely to have a higher tax liability. Because the Funds invest in Underlying ETFs an investor will indirectly bear the principal risks of the Underlying ETFs, including but not limited to, risks associated with investments in ETFs, large and smaller companies, real estate investment trusts, foreign securities, non-diversification, high yield bonds, fixed income investments, derivatives, leverage, short sales and commodities. The Fund will bear its share of the fees and expenses of the underlying funds. Shareholders will pay higher expenses than would be the case if making direct investments in the underlying funds. All investing involves risks. Fund holdings and sector allocations are subject to change and should not be considered a recommendation to buy or sell any securities. Reference to other securities should not be interpreted as a recommendation of these securities. Diversification does not assure a profit nor protect against loss in a declining market. As of 10/21/2015, the fund does not hold any of the following securities in Its portfolio: SPY, IWM The ATAC Inflation Rotation Fund is distributed by Quasar Distributors, LLC. No other products mentioned in this piece are distributed by Quasar. The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. One may not directly invest in an index. The 2014 Charles H. Dow Award was open to anyone with an interest in technical analysis who submitted a paper prior to the deadline. The Papers were judged on the following standards; the paper is based upon the concepts of technical analysis, the topic is substantive, the research is thorough, include the results of applying the technique to a sufficient quantity of data that covers at least one full market cycle and preferably longer, shows the application of accepted standards of testing (including but not limited to, statistical significance, Chi Square, Monte Carlo simulations, and statistical correlation), the writing meets generally accepted standards of style for publications and college level writing, the analysis and conclusions are useful and enhance the understanding of market action, a paper shall not have been previously published in any media made available for public dissemination, and a paper should be written for an audience of knowledgeable technical analysts. The judging panel reserves the right to not select a winner if it deems that there are no submissions that are worthy of being given the award. The NAAIM Wagner Award was open to all investment practitioners, academic faculty and doctoral candidates in the field. The papers were judged on the following criteria; practical significance to practitioners of active investing (which NAAIM broadly defines as investment strategies and techniques that improve upon the risk-adjusted return obtainable from a passive, buy-and-hold, investment strategy), quality of exposition, analytical rigor, and novelty of results. An ideal paper would provide evidence of the validity of an active investing approach via an example of a trading system that outperforms the market by some well accepted metric such as risk adjusted return, annual return, drawdowns, etc. Examples of supporting evidence sought include backtesting details and parameter sensitivity analysis. A jury of scholars and investment professionals reviewed and awarded the prizes. The National Association of Active Investment Managers or NAAIM was formed in 1989 as a non-profit association of registered investment advisors who provide active money management services to their clients, in order to produce favorable risk-adjusted returns as an alternative to more passive, buy and hold strategies.