Alpha Investors utilizes proprietary algorithms and statistical analyses to provide individual investors with advice on ETF selection, as well as, when to buy and sell them to achieve maximum alpha. Algorithmic investing (also known as quantitative trading) utilizes computer algorithms instead of active managers for security selection and implementing buys/sells.
The return an active investor seeks over what a passive index would return.
Alpha – The blog
Alpha (subscription required) is a blog posting of our proprietary algorithm and statistical analysis results providing buy, hold, or sell guidance to individual investors of ETFs.
What the proprietary algorithms do
Algorithms collect data from the stock market and perform statistical analyses on a weekly basis, providing insight on the two fundamental questions every investor must answer:
- Which securities should I invest in?
- When should I own those securities?
Universe of ETFs
In the US, there were over 1,700 ETFs with over $2.5 trillion in AUM at year-end 2016X. Over a hundred ETFs were created annually over the past decade. Selecting an ETF can be a daunting task. To ensure the overall viability of the portfolio, newer, smaller, illiquid, or levered ETFs are not investable with our objectives.
Security Selection Algorithm
Liquidity is paramount to security selection! Security selection algorithms optimize selection of ETFs from among those with the most Assets Under Management and the highest daily volume leaders traded on the AMEX, NYSE or NASDAQ exchanges.
Algorithm based holdings
The algorithm determines when to hold a security based on statistical analyses of the security’s relative performance. The algorithm does NOT consider current holding periods, gains, or losses. The goal is always to hold a security as long as possible, however, it is strongly encouraged to employ the algorithm trading system in accounts not subject to yearly taxation of capital gains.