To offer small Banks and Credit Unions a stand alone investment management platform that will service and monetize current customers in a manner that many of these institutions currently are not.
systematic unemotional reactions to changes in sentiment
rules based investing
Sentiment
Markets are a human construct and thus are largely driven by sentiment. One day people are hyper focused on the growth multiples of technology stocks, the next day they are looking at a specific sector like inflationary commodities and the next day they are fixated on the Fed's interest rate policy and its effect on the greater economy. No one can predict what the next fad will be, but it is important to not run to one side of the boat with everyone else with every news headline. Consistency and adjusting your risk allocation according to how you are progressing towards your goal is all you can do. In other words: using simple rules and nimbly yet conservatively adjusting investment choices according to quantifiable parameters.
Algorithm
An algorithm is simply a function that executes an instruction given certain criteria. Much like a hand instantly moves away from a hot pan and willingly towards cool grass, your brain reacts instinctively and automatically to certain conditions. However, how many times were you fooled by touching a beautifully plated hot dish or were timid to venture outside on a cloudy day that later showered your neighborhood in warm sunshine? Caution, focus and removing the human emotion from the buy and sell decision is a key component towards achieving positive investment returns. Using an algorithm or a set of simple rules focused on how well your portfolio is moving towards your goal is what we think is the best way to actually achieve your goal. By keeping you on track and invested, our algorithm, systematically moves your portfolio along through time exposing you to either more or less volatile investments depending on how well we are moving you towards your performance goal.
Slow and steady wins the race.
Rebalancing
A portfolio needs to be rebalanced as markets, performance and time horizons dictate. Markets will move up or down and the effect on individual investments within a portfolio will change by varying vectors and magnitudes to each other. As outperformers grow exposure needs to be paired back and just as importantly as relative underperformance of an investment category needs to be increased even if performance has lagged. The portfolio needs to be mechanically rebalanced into or out of these risk assets according to how the portfolio is performing to its original expectations as well as to what exposures are needed to achieve the original goal. This systematic rebalancing is done through an algorithm.
