Wall Street firms focus on earning profits which can conflict with serving retail clients. Modern Portfolio Theory advocates buy-and-hold investing using computer models to allocate assets, but these models make flawed assumptions and failed to predict major market downturns. Tactical portfolio management shifts allocations in response to changing conditions rather than keeping allocations static, providing the opportunity to move into safer assets when risks are high. The author's firm uses technical analysis and point-and-figure charting to determine the strongest performing assets and shift allocations between them based on changing supply and demand trends in the markets.
Algorithmic Finance Meetup: Starmine Short Interest Talk Quantopian
With the commoditization of such basic quant factors as value and momentum, in recent years systematic investors have turned more and more to sentiment based alpha signals. Aggregated open short interest level provides a profitable, low turnover signal rooted in buy-side sentiment, aka "the smart money." Dr. Stauth will cover the basics of short selling and data availability and will review the research and proprietary formulation of the StarMine short interest model as well as covering a range of sample trading strategies.
MintKit Growth Index: A Benchmark of the Stock Market for Sprightly Growth at...MintKit Institute
The ideal of investment lies in a robust strategy for high growth at low risk. Granted, a perfect solution could never emerge in an imperfect world such as ours. Even so, certain approaches toward the objective make more sense than others.
By received wisdom, the leading benchmarks of the stock market are cogent and meaningful portraits of the action on the bourse. Sadly, though, the reality differs greatly from the mirage.
For starters, the renowned indexes track the stocks in the prime of their lives rather than the entirety of their lifespans. In the process, the yardsticks gloss over the fact that death is the way of life for all companies along with their equities. The outcome is a grossly distorted picture of the payoff for the entire throng of shareholders over the long range.
Even in the near term, the traditional benchmarks have little or no bearing on the mass of participants. For instance, many an index monitors a group of stocks according to their market caps. While this approach may befit a profile of the bourse as a whole over the short run, the unbalanced scheme has scant relevance to the thoughtful investor who is most unlikely to load up their portfolios according to the market caps of the stocks at hand.
For these and other reasons, the traditional benchmarks are unsuitable as beacons for the investing public. Instead, a worthwhile index should address the true concerns of serious investors in areas ranging from pertinent metrics to workable strategies.
An example of a fruitful scheme involves the equal weighting of stocks within a benchmark. The benefits lie in conceptual elegance as well as practical relevance for the participants. Another drawcard is the tendency of uniform weighting to deliver higher returns compared to the labored scheme based on market caps.
In seeking a trusty path, a basic step is to canvass the timeworn benchmarks in multiplex areas ranging from conceptual soundness and logical rigor to common sense and pragmatic import. The wholesome assay then leads to guidelines for designing trenchant beacons suited to investors in tending their private portfolios. The enhanced framework is showcased by the MintKit Growth Index: a model benchmark geared toward promising stocks poised for zesty growth at modest risk.
Algorithmic Finance Meetup: Starmine Short Interest Talk Quantopian
With the commoditization of such basic quant factors as value and momentum, in recent years systematic investors have turned more and more to sentiment based alpha signals. Aggregated open short interest level provides a profitable, low turnover signal rooted in buy-side sentiment, aka "the smart money." Dr. Stauth will cover the basics of short selling and data availability and will review the research and proprietary formulation of the StarMine short interest model as well as covering a range of sample trading strategies.
MintKit Growth Index: A Benchmark of the Stock Market for Sprightly Growth at...MintKit Institute
The ideal of investment lies in a robust strategy for high growth at low risk. Granted, a perfect solution could never emerge in an imperfect world such as ours. Even so, certain approaches toward the objective make more sense than others.
By received wisdom, the leading benchmarks of the stock market are cogent and meaningful portraits of the action on the bourse. Sadly, though, the reality differs greatly from the mirage.
For starters, the renowned indexes track the stocks in the prime of their lives rather than the entirety of their lifespans. In the process, the yardsticks gloss over the fact that death is the way of life for all companies along with their equities. The outcome is a grossly distorted picture of the payoff for the entire throng of shareholders over the long range.
Even in the near term, the traditional benchmarks have little or no bearing on the mass of participants. For instance, many an index monitors a group of stocks according to their market caps. While this approach may befit a profile of the bourse as a whole over the short run, the unbalanced scheme has scant relevance to the thoughtful investor who is most unlikely to load up their portfolios according to the market caps of the stocks at hand.
For these and other reasons, the traditional benchmarks are unsuitable as beacons for the investing public. Instead, a worthwhile index should address the true concerns of serious investors in areas ranging from pertinent metrics to workable strategies.
An example of a fruitful scheme involves the equal weighting of stocks within a benchmark. The benefits lie in conceptual elegance as well as practical relevance for the participants. Another drawcard is the tendency of uniform weighting to deliver higher returns compared to the labored scheme based on market caps.
In seeking a trusty path, a basic step is to canvass the timeworn benchmarks in multiplex areas ranging from conceptual soundness and logical rigor to common sense and pragmatic import. The wholesome assay then leads to guidelines for designing trenchant beacons suited to investors in tending their private portfolios. The enhanced framework is showcased by the MintKit Growth Index: a model benchmark geared toward promising stocks poised for zesty growth at modest risk.
Emotions Affect Markets in Predictable Ways: Behavioral Finance and Sentiment...Cristian Bissattini
Financial markets are not purely rational. Emotions play a large part in stock pricing. H2O Sentiment Analysis captures these emotions, the “animal spirits” coined by Keynes, through social media post messages.
We employ a novel way to capture and quantify sentiment based on authors' credibility, namely tracking the accuracy of past recommendations. Our results provide evidence that there is strong and useful information on investor sentiment and likely stock market movements.
Our research (done in collaboration with the Università della Svizzera italiana) has demonstrated that we can use this information in order to make predictions about stock price changes and to implement trading strategies based on sentiment analysis that perform, on average, better than traditional investment strategies like Buy and Hold or Moving Averages.
Finding Alpha from Stock Buyback Announcements in the Quantopian Research Pla...Quantopian
Stock buybacks are at record levels and several studies have established windows of alpha opportunity around stock buyback announcements. In this talk EventVestor founder Anju Marempudi and Quantopian client engineer Seong Lee will discuss buyback trends, analyzing share buybacks data for insights, conducting an event study to measure excess returns around buyback announcements, and finally building a trading algorithm with back-testing using the Quantopian Research platform.
This presentation was part of the QuantCon 2015 Conference hosted by Quantopian. Visit us at: www.quantopian.com.
Quantopian provides this presentation to help people write trading algorithms - it is not intended to provide investment advice.
More specifically, the material is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory or other services by Quantopian.
In addition, the content neither constitutes investment advice nor offers any opinion with respect to the suitability of any security or any specific investment. Quantopian makes no guarantees as to accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.
All You Need To Know About Retirement and the Stock Market
Everybody wants a comfortable retirement. It’s never too early to start saving for life after work, but what happens when you are at or near retirement? Should you keep doing the same thing? Or should your retirement strategy change?
#howtotrade #learntotrade #tradingstrategies #trading #investing #retirement #pensions
The presentation tries to give an overview of why an individual (retail investor) should opt for investing in the financial markets through various vehicles for getting returns that can beat inflation and other asset classes. Reach out for getting more clarity or assistance regarding the same.
Welcome to the final installment in our Evidence-Based Investment Insights: Bringing the Evidence Home. We hope you've enjoyed reading our series as much as we've enjoyed sharing it with you. Here are the key take-home messages from each installment:
3 ways to know if the price is right identify the overpriced & under pri...Hello Policy
Investors hoping to maximize their gains try to identify stocks that are mispriced, creating long opportunities for under-priced companies and short opportunities for overpriced shares. Not everyone believes a stock can be mispriced, particularly those who are proponents of the efficient markets hypothesis. Efficient markets theory assumes that market prices reflect all available information regarding stock and this information is uniform. Such observers also contend that asset bubbles are driven by rapidly changing information and expectations rather than irrational or overly speculative behaviour.
Investing 101 - A beginner's guide to investing and investment conceptsWealthminder
Everything (important) you need to know about investing and investment related concepts. We'll walk you through the basics of everything from a financial plan to different types of investment accounts and different types of investment assets.
This is the internal presentation we give to all new employees of Wealthminder. They thought we should share it with everyone.
Emotions Affect Markets in Predictable Ways: Behavioral Finance and Sentiment...Cristian Bissattini
Financial markets are not purely rational. Emotions play a large part in stock pricing. H2O Sentiment Analysis captures these emotions, the “animal spirits” coined by Keynes, through social media post messages.
We employ a novel way to capture and quantify sentiment based on authors' credibility, namely tracking the accuracy of past recommendations. Our results provide evidence that there is strong and useful information on investor sentiment and likely stock market movements.
Our research (done in collaboration with the Università della Svizzera italiana) has demonstrated that we can use this information in order to make predictions about stock price changes and to implement trading strategies based on sentiment analysis that perform, on average, better than traditional investment strategies like Buy and Hold or Moving Averages.
Finding Alpha from Stock Buyback Announcements in the Quantopian Research Pla...Quantopian
Stock buybacks are at record levels and several studies have established windows of alpha opportunity around stock buyback announcements. In this talk EventVestor founder Anju Marempudi and Quantopian client engineer Seong Lee will discuss buyback trends, analyzing share buybacks data for insights, conducting an event study to measure excess returns around buyback announcements, and finally building a trading algorithm with back-testing using the Quantopian Research platform.
This presentation was part of the QuantCon 2015 Conference hosted by Quantopian. Visit us at: www.quantopian.com.
Quantopian provides this presentation to help people write trading algorithms - it is not intended to provide investment advice.
More specifically, the material is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory or other services by Quantopian.
In addition, the content neither constitutes investment advice nor offers any opinion with respect to the suitability of any security or any specific investment. Quantopian makes no guarantees as to accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances.
All You Need To Know About Retirement and the Stock Market
Everybody wants a comfortable retirement. It’s never too early to start saving for life after work, but what happens when you are at or near retirement? Should you keep doing the same thing? Or should your retirement strategy change?
#howtotrade #learntotrade #tradingstrategies #trading #investing #retirement #pensions
The presentation tries to give an overview of why an individual (retail investor) should opt for investing in the financial markets through various vehicles for getting returns that can beat inflation and other asset classes. Reach out for getting more clarity or assistance regarding the same.
Welcome to the final installment in our Evidence-Based Investment Insights: Bringing the Evidence Home. We hope you've enjoyed reading our series as much as we've enjoyed sharing it with you. Here are the key take-home messages from each installment:
3 ways to know if the price is right identify the overpriced & under pri...Hello Policy
Investors hoping to maximize their gains try to identify stocks that are mispriced, creating long opportunities for under-priced companies and short opportunities for overpriced shares. Not everyone believes a stock can be mispriced, particularly those who are proponents of the efficient markets hypothesis. Efficient markets theory assumes that market prices reflect all available information regarding stock and this information is uniform. Such observers also contend that asset bubbles are driven by rapidly changing information and expectations rather than irrational or overly speculative behaviour.
Investing 101 - A beginner's guide to investing and investment conceptsWealthminder
Everything (important) you need to know about investing and investment related concepts. We'll walk you through the basics of everything from a financial plan to different types of investment accounts and different types of investment assets.
This is the internal presentation we give to all new employees of Wealthminder. They thought we should share it with everyone.
Al identificar una fuerte problemática sobre la identificación entre criminal y delincuente se realiza el siguiente escrito, mostrando diferencias así como breve conceptos.
In this paper I have shown by adopting a strategy that fuses the trend-following nature of technical analysis and the stage identification features of behavioral analysis investment decisions can be enhanced. We see that there are repeatable behavioral tendencies that have existed since exchanges were first put in place.
I express my sincere respect to the authors and my teachers from whom I remain updated in this segment. Due care have been taken so as not to violate the copyright issues.
An Intro to the Financial Services IndustryEric Tachibana
The Financial Service Industry is one of the most attractive industries to target if you are a consultant. However, when selling into, or delivering for, Financial Services Institutions (FSIs), it is useful to have some understanding of how FSI business models work, and the unique requirements that drive their IT strategies.This deck is a living document that hopes to act as a primer for consultants who need to support FSI clients, but who may not have prior experience in the sector.
The Simple Truth Behind Managed Futures & Chaos Cruncher
What is a Futures Contract?
What are Managed Futures?
Growth of Managed Futures?
BTOP50 Under Crisis
Robust Diversification
So Why Do Managers Use Futures?
Managed Futures Reduce Risk
Futures Markets are not a Casino
Hedging A Stock Portfolio
Algorithmic or “Systems” Trading
Why “Quant Trade” Uses Chaos Theory and Fractals in Trading
Efficient verses the Fractal Market Hypothesis
Fractal Attractors
Chaos Cruncher
Portfolio Scalability
The paper opens with an overview of the
commodity trading advisor (CTA) sector, highlighting the
significant growth that has taken place in the managed
futures industry in recent years and explaining how
the managed futures strategies that CTAs employ
work in practice. The breadth of sub-strategies under
the managed futures umbrella are then examined.
The third part of the paper examines the benefits and
perceived risks to investors of allocating to managed
futures strategies and also addresses various common
misunderstandings about CTAs.
The paper concludes by exploring the common ways
as to how investors can access the various investment
strategies that are available
Investment products vary in risk, return and duration. So do investor objectives. Successfully matching financial instruments with financial plans takes skill, know how and ability.
What Is a Tick in Securities Trading and How Does It Work.pdfCheap Stock Brokers
Ticks are often measured in fractions or decimals, depending on the market and asset being traded. For example, if you're trading stocks on an exchange with a minimum tick size of $0.01, any movement larger than that will be considered significant.
But ticks aren't just about numbers; they serve as vital indicators for traders. By analyzing tick movements over time, investors can gain insights into market trends and make informed decisions accordingly.
This paper outlines the basics of Modern Portfolio Theory, the Capital Asset Pricing Model, 'Technical Analysis' and the Efficient Market Hypothesis. Far from being obsolesced, the underlying concepts still exist today though digital disruptions du jour shroud them,
Similar to Investing with Accurate Financial Solutions (20)
2. As Paul Harvey, the great radio announcer, used to say, “And now you know the rest of the story.”
Wall Street is dominated by large institutions, also known as Broker Dealers, whose primary focus is
earning greater and greater earnings year after year. If you think about that for a moment, one must
understand these firms must close new deals, bring in ever increasing assets and make income
generating transactions to meet their goals. Unfortunately, history has shown the search for large
institutional deals which generate millions of dollars are in direct conflict with the interests of the retail
clients they also serve.
Modern Portfolio Theory (MPT) is a theory of finance that attempts to maximize a
portfolio’s expected return for a given amount of portfolio risk, or equivalently minimize risk for a
given level of expected return, by carefully choosing the proportions of various assets. MPT is
advocated by large financial institutions who seek to advocate Buy and Hold investing.
MPT is primarily delivered by computer. A brokerfinancial
adviser asks some questions and gains a feeling for the
investor’s risk tolerances. They then key into a computer, say,
moderate risk level and the computer spits out a Strategic Asset
Allocation pie created by all kinds of assumptions on future
interest rates, future market volatility, future returns on baskets
of stocks, and so on. You get it – future this, future that,
assumption this, assumption that, use a Monte Carlo simulation,
spin the wheel lots of times and voila, your strategic pie.
We believe this strategy is flawed since MPT assumes investors are rational and markets are efficient.
For MPT’s mathematical formula to work it assumes the correlations between asset classes are fixed,
even though history shows they are affected by “external events” like crises.
Guess what? In the year 2000 these
simulations suggested to investors that their
portfolios would grow at a rate greater than
10% for the next twenty years. How’d that
work out? The market caved in after the dot-
com bubble burst, 9/11 happened, and in
2008 the whole market melted down, all
asset classes together. Those computerized
guesses did not work.
As the graph shows, there have been very
different investment outcomes during the past
five decades. The 1960s, 1980s and the
1990s were a time when the conditions were
ripe for investing in equities. The rate of
return grew as the percentage ownership in
equities increased.
3. We all understand investing conditions do change; what seems to get lost in the process then is
that an investor’s investment allocation needs to respond accordingly. During the 1970s and 2000s our
economy suffered from uncertain times. Although there were a number of short term opportunities in
equity markets, the graph clearly indicates “Buy and Hold” investors were not rewarded for the
additional risk taken. Rather the 1970s and 2000s favored safety oriented techniques and bond
investors were rewarded.
There is another way to manage your assets
Although Modern Portfolio Theory suggests “don’t worry, things will be fine in the long run”, we
believe there is a large opportunity cost if you wait long enough for the bad stuff to ultimately turn
good. We call this thought process “Buy and Hope”, rather than the mutual fund branded phrase of
“buy and hold”. In fact, when you look at how the Large Broker Dealers and Investment Banks
manage their money, you will come to believe that Buy and Hold is not an investment strategy!
What does all this mumbo jumbo mean for you?
Typically when an investor sits down for “planning” purposes, an
advisor will suggest a traditional pie graph. The “pie” illustrates the
recommended Asset Allocation which defines the specific percentages
to be invested into different asset types reflecting your risk tolerance.
Your portfolio is then periodically rebalanced back to the target
percentages. For all intents and purposes the allocation percentages
remain static regardless of the market’s direction.
The theory to static asset allocation is if you spread your investment
dollars across several asset classes, risk can be reduced in the overall
portfolio. Recent history, however, has provided a number of
examples where the theory does not work; do you remember 1987,
1998, 2000, 2002 and 2008?
We are one of the few firms in the area which actively utilizes Tactical
Portfolio Management. We too follow a process of investing in
different asset types. Our intention though is to shift the weighting in
each asset class as investment conditions change. The percentages
invested will not remain static over time, rather the amount invested in
stocks, bonds and cash will fluctuate depending on current trends in the
various markets.
This strategy provides a systematic and disciplined way of
overweighting asset classes when they are in favor. It also provides a
way of transferring riskier assets into Cash Alternatives when there is no
better place to be.
4. Our Investment Methodology
We utilize technical analysis rather than fundamental analysis. The meltdown of 2008,
once again, proved that even fundamentally sound stocks will fall precipitously when more
investors are selling than buying shares, regardless of their fundamental pedigree.
The roots to our methodology date back to the late 1800's and have been proven effective in
both rising (bull) and falling (bear, or "fair") markets.
The first proponent of the methodology we use was Charles Dow, also the original
editor of the Wall Street Journal. Charles Dow recognized the merits of recording the supply
(sellers) and demand (buyers) relationship in any investment.
Our process embodies a set of rules that have been proven across many decades - in good
markets and bad - to serve as your "eyes on the road" for the financial markets.
Our investment decisions are made utilizing Point & Figure Charting.
The Point & Figure methodology has evolved over the past 100+ years, but remains at its core a
logical, organized means for recording the supply and demand relationship in any investment vehicle.
As investors, we are innately familiar with the forces of supply and demand; it is after all the first
subject introduced in any ECONOMICS 101 class. As consumers, we experience the supply and
demand impact regularly in our daily lives.
We compile a list of investments which represent
various assets in Domestic & International Equities,
Fixed Income (bonds), Commodities, Currencies and
cash.
We rank these assets from strongest to weakest in
performance based upon a Relative Strength (RS)
comparison.
Our computers perform thousands of calculations to
determine which assets have emerged as the leaders
according to our methodology.
As the assets fluctuate in strength, we will purchase the
stronger performing assets and watch for changing
market trends.
We use Point and Figure Charting (PnF) to track
the price movement of our investments in an organized
manner. Our goal is to ascertain who is winning the
battle of supply and demand (sellers or buyers).