A lot of ground gets covered in this interview with Jim Lonergan of the Connors Group, including the high degree of correlation between asset classes, and why cash is an effective tool for preserving capital in poor market conditions.
Advisors can better manage their clients’ portfolio risk by using an objective and systematic method to move money into cash when the market environment warrants, Lonergan says. The portfolio models are designed to reflect investors’ specific interests, says Phil Suarez, director of education for the Connors Group.
March 9th marked the 3 year anniversary of the current bull market. The S&P 500 has scored an impressive 110% run-up, and I think we can officially declare that the dreaded double dip recession didn’t happen.
The Connors Group announced Thursday the launch of The Machine Advisor, a web-based investment-decision and marketing-support software that gives advisors a quantified and systematic approach to active investing, portfolio management and risk management.
Their resulting portfolio models are largely based on the work of Nobel Prize winner Daniel Kahneman (author of “Thinking, Fast and Slow”) and Amos Tversky, whose work in the 1970s explored the flaws in the Efficient Market Theory, and led to the creation of Behavioral Finance. Connors reasoned that if conventional MPT asset allocation is not the solution, effective portfolio diversification could be achieved by diversifying investment strategies (through models) instead of, or in addition to, diversifying asset class, if those models were based on short-term strategies designed to take advantage of daily behavior in market pricing.
Jersey City-based analytics and commentary provider Connors Group will this week unveil a production release of The Machine Advisor, a version of its quantitative research platform, The Machine—which generates buy and sell signals based on analysis of historical data—aimed at investment advisors.