๐ ๐ ๐ฆ๐๐ฟ๐ฎ๐๐ฒ๐ด๐ ๐ง
I have a predominantly quantitative approach to investment and use large data-bases, advanced filtering, deep, multi-factor portfolio engineering techniques to take advantage of known risk premia to enhance risk adjusted returns.
In simpler words, I select my investments by screening 1000s of stocks using large databases and filter for systematic characteristics that explain stock returns over time. These factors have been extensively studied in the financial literature and I believe provide the building blocks for superior portfolio returns.
This is known as ๐ณ๐ฎ๐ฐ๐๐ผ๐ฟ ๐ถ๐ป๐๐ฒ๐๐๐ถ๐ป๐ด or more specifically ๐บ๐๐น๐๐ถ-๐ณ๐ฎ๐ฐ๐๐ผ๐ฟ ๐ถ๐ป๐๐ฒ๐๐๐ถ๐ป๐ด. . I consider 3 principal factors; ๐ด๐ผ๐ผ๐ฑ ๐๐ฎ๐น๐๐ฒ, ๐น๐ผ๐ ๐ฏ๐ฒ๐๐ฎ (๐ฉ๐ผ๐น๐ฎ๐๐ถ๐น๐ถ๐๐), ๐ฎ๐ป๐ฑ ๐บ๐ผ๐บ๐ฒ๐ป๐๐๐บ. However, I also filter out any potential investments according to many red flag factors such as high debt etc.
๐ฉ๐ฎ๐น๐๐ฒ ๐ฎ๐ป๐ฑ ๐ ๐ผ๐บ๐ฒ๐ป๐๐๐บ: Identified by Eugene Fama and Kenneth French (Value) and Jegadeesh and Titman (Momentum) as foundational factors.
๐๐ผ๐ ๐๐ฒ๐๐ฎ (๐ผ๐ฟ ๐๐ผ๐ ๐ฉ๐ผ๐น๐ฎ๐๐ถ๐น๐ถ๐๐): Pioneered in research by Robert Haugen and Nardin Baker, showing that low-volatility stocks can outperform on a risk-adjusted basis.
Each individual investment may not have all of these qualities; However, I aim for the portfolio as a whole to have a balance between all of the factors, this approach also benefits from whatโs know as ๐ณ๐ฎ๐ฐ๐๐ผ๐ฟ ๐ฑ๐ถ๐๐ฒ๐ฟ๐๐ถ๐ณ๐ถ๐ฐ๐ฎ๐๐ถ๐ผ๐ป, performance is not reliant on one strategy.
๐ฃ๐ผ๐ฟ๐๐ณ๐ผ๐น๐ถ๐ผ ๐๐ผ๐ป๐๐๐ฟ๐๐ฐ๐๐ถ๐ผ๐ป ๐
In balancing the portfolio, I leverage ๐ฟ๐ถ๐๐ธ ๐ฑ๐ถ๐๐ฒ๐ฟ๐๐ถ๐ณ๐ถ๐ฐ๐ฎ๐๐ถ๐ผ๐ป principles and ensure a robust portfolio construction by focusing on how securities interact with each other and the broader market. This approach prioritizes ๐๐๐ฎ๐ฏ๐ถ๐น๐ถ๐๐ ๐ฎ๐ป๐ฑ ๐ฝ๐ฟ๐ฒ๐ฑ๐ถ๐ฐ๐๐ฎ๐ฏ๐ถ๐น๐ถ๐๐ and aims to enhance risk adjusted returns, which when measured on my portfolio, actually score very highly.
I also place a big importance on minimising calculable risk. This is reflected through my weighting strategy which considers inter-portfolio correlations, but I also consider cross-industry diversification and international diversification by investing a minority in non-US ETFs and a small portion in crypto-currency.
This quantitative approach provides me with a model portfolio; However, I still filter and adjust based on my expectations with regards to ๐บ๐ฎ๐ฐ๐ฟ๐ผ-๐ฒ๐ฐ๐ผ๐ป๐ผ๐บ๐ถ๐ฐ ๐๐ฟ๐ฒ๐ป๐ฑ๐, ๐ณ๐ถ๐๐ฐ๐ฎ๐น ๐ฎ๐ป๐ฑ ๐บ๐ผ๐ป๐ฒ๐๐ฎ๐ฟ๐ ๐ฝ๐ผ๐น๐ถ๐ฐ๐ถ๐ฒ๐ ๐ฎ๐ป๐ฑ ๐๐ฎ๐น๐๐ฒ ๐ท๐๐ฑ๐ด๐บ๐ฒ๐ป๐๐ on general market risk and the fundamental quality and prospects of the underlying businesses that I invest in. Not everything can be factored into equations, and this keeps all bases covered. The quantitative approach provides an efficient base from which I adjust. I draw from my 8 years of investing and 3 years as a popular investor. Iโve studied Investment, financial risk management and technology to a masterโs degree and specialised in asset management, security analysis and portfolio construction.
I constantly monitor financial news and macroeconomic data adjust the portfolio risk base on my research. I also post regularly to provide education and a clearer understanding of investing; I will always have the time for any questions or curiosities from followers!
๐๐ผ๐ฎ๐น๐ ๐ฎ๐ป๐ฑ ๐ฅ๐ฒ๐ฐ๐ผ๐ฟ๐ฑ ๐
My aim is also to keep the portfolio less risky than investing in, whilst outperforming the, SP500 Index, a price index representing aggregate market performance in the US stock market (my main area). This risk is measured by volatility, correlation to the rest of the market, and downside risk (drawdown).
Over the past 3 years I have produced ๐ฐ๐ต.๐ณ๐ฑ%, ๐ฐ๐ผ๐บ๐ฝ๐ฎ๐ฟ๐ฒ๐ฑ ๐๐ผ ๐๐ต๐ฒ ๐ฆ๐ฃ๐ฑ๐ฌ๐ฌ ๐๐ต๐ถ๐ฐ๐ต ๐ฟ๐ฒ๐๐๐ฟ๐ป๐ฒ๐ฑ ๐ฎ๐ต.๐ต๐ฌ%.. you can see the year-by-year breakdown in my stats.
Outperformance is great, but I think the fact that in ๐ฎ๐ฌ๐ฎ๐ฎ ๐บ๐ฎ๐ฟ๐ธ๐ฒ๐ ๐ณ๐ฒ๐น๐น ๐ฎ๐ฌ%, ๐ ๐ผ๐ป๐น๐ ๐น๐ผ๐๐ ๐ด% is the biggest testament to robustness of the strategy, and its risk-conscious approach, and I believe that protecting from losses is just as important as making gains.
This portfolio is ideal for people looking to invest for at-least 3 years, and who are comfortable with basic volatility and are looking for their savings to grow in safe hands.
I personally invest nearly all of my savings into this portfolio, and I am now responsible for nearly $1 Million AUM from etoro copy investors. So I treat this account with the upmost care and attention to detail as I can. I research, analyse and work on this portfolio nearly every day, so you donโt have to.
As I said before, I always have to time for questions, curiosities, or any general thoughts from followers, so donโt hesitate to comment!
$SPX500$BTC$NSDQ100... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
Seeing you do so well with your stocks is honestly inspiring. Iโm getting around the same return percentage too and analysing and making moves on my own, but with way less money invested, so it makes me feel like Iโm actually doing well and heading in the right direction. Thanks for the inspo. ... Show More
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