An Pham Business - Finance, Stock Market, Quotes, News
- Trade Richer
- Sep 28, 2019
- 2 min read
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Trade on the stock market to benefit from the fast execution and dividend payments.
We help investors to spend less time researching and more time living. We are here to demonstrate a system aimed to minimize loss during downturns and also beat the market in up turns.
We offer simple Monthly Asset Rotation Strategies.
Asset Rotation is a proven concept that's been around for a long time. What TradeInformed offers is a rules based system to take the guesswork out of what to rotate to and when. We use market data to test the system over long periods of time and with different portfolios. We always choose the longest possible test period based on historical data available. We apply extremely effective but simple quantitative analysis to rank the funds in each portfolio using Mathematica software and data.
A key characteristic we focus on is simply price momentum, which Mebane Faber demonstrated is quite powerful in his 1973 to 2008 study published in the book "The Ivy Portfolio". A very simple momentum rotation strategy demonstrated 16.4% annual growth over the period with 27% drawdown. Faber explained how momentum also demonstrated market beating returns in the period of 1956 to 2007 in a comprehensive UK market study by Elroy Dimson, Paul Marsh, and Mike Staunton. We have added features to Faber's concept and adapted it to use lists primarily made up of stocks which increased the return seen in simulation significantly. We have added features that help to minimize drawdown. By minimizing losses, the overall return improves. We keep Warren Buffet's first two rules of investing in mind always, which are "1. Never lose money, 2. Never forget rule #1". Of course these are really goals as even Warren Buffet loses a little from time to time and is doing "OK" ha ha. One easy way to remember how important it is to minimize losses is to think about what % gain it takes to get back to even from a 50% loss: the answer is 100%!
All of our portfolios show significantly lower drawdown than the SPY (S and P 500 ETF). As usual, higher return potential is linked to higher risk. Only each individual can decide how much risk to take but we have a variety of options to choose from. Some may choose a portfolio of multiple or all the portfolios on this site, depending on their situation and their professional investment advisor's guidance. Please compare our drawdowns to other options out there. It's also useful to compare the risk adjusted return by studying the MAR ratios (CAGR/max Drawdown).
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