Investment Guidance Solutions introduced a software tool for mutual fund investing, that gives buy or sell signals based on whether it is better to be invested in a specific fund or in cash.

The product, IGSignals, allows for “greater principal protection in down markets and participation in up markets,’’ the company said.

“Today, more than ever, risk avoidance and sequence of returns are vital for a successful financial plan, especially for the 77 million baby boomers in or nearing retirement,” said Phil Lussier, co-founder and CEO of Investment Guidance Solutions. “IGSignals enables asset managers and financial advisors to construct and manage dynamic portfolios for clients who are looking to avoid downside risk.”

IGSignals is designed to help asset managers to “actively manage risk versus the traditional buy and hold strategies” that have been pursued in the mainstream of mutual fund investing.

In its form of signaling, a “buy” indicates that the fund is likely to outperform cash and a “sell” indicates that it is likely to underperform cash.

Lussier is the former chairman and chief executive of CitiStreet, a leading global service provider to the retirement and benefits delivery industry, and a joint venture between State Street and Citigroup. Previously, Mr. Lussier held senior positions with State Street, State Street Global Advisors, Putnam Investments and AT&T.

Tom Steinert-Threlkeld writes for Securities Technology Monitor.