When most investors do due diligence they look at past returns and expect them to persist into the future. Unfortunately, they rarely do. Forward looking due diligence takes past returns with a grain of salt, the goal is to determine where the returns came from and […]
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Using Intra-Day Models to Improve Tactical Asset Allocation
Just about any form of tactical asset allocation (TAA) will work extremely well in a straight up market and a straight down market. However, many methodologies will struggle in a choppy market that either has no real trend or that moves so quickly that a TAA strategy […]
Why We Use Counter Trend Models
Counter trend models seek to buy into market weakness and sell into market strength. They expect that markets overreact and will be mean reverting in nature. When the market rallies they expect that the market will go to far and that some of that rally […]
Forward Looking Due Diligence
One important skill we try to teach financial advisors is how to do forward looking due diligence on money managers and investment strategies. Backward looking due diligence looks at what a manager or strategy did in the past and assumes, usually wrongly, that past performance will persist […]