Historically, savvy managers with top performing funds earned bragging rights to their “edge” by having access to information and knowledge that allowed them to make wise decisions and achieve strong returns. Today, however, we are overloaded with information and the playing field seems to have leveled. With so much available data, how do managers gain an edge over the competition and how does an investor know which managers have the “edge” required to add value to their portfolio?
Fortunately, technology has fueled managers with the tools needed to succeed and those with the skill set and emotional intelligence to mine this information effectively are able to profit in a variety of market conditions. A few ways to identify managers with an Investment Edge are:
Experience + Track Record
Investors are advised to select managers with specific expertise in their investment style or approach. When assessing the firm’s competitive advantage or edge, understand how the team identifies and shares intellectual capital. Ask how long the existing team has worked together and insist on full disclosure with respect to track record. Stability is a valuable indicator and excessive turnover is a red flag.
In addition, a long term track record of success in various market cycles is more important than short term performance. Discipline and a clear focused adherence to the core investment strategy increase the likelihood of future success.
Optimal Fund Structure
An investment fund’s structure is perhaps the most important consideration when selecting a manager. Be sure the manager explains the strategy to you in a detailed manner and be sure it makes sense. For example, as a specialist in Managed FX investment accounts via the global foreign currency exchange markets, Mediatrix Capital has incorporated state-of-the-art technology and strategies that have been proven to provide consistent and reliable returns for three straight years. Every manager should have a similarly clear-cut “mission.”
Before making an investment decision know the fee structures charged by the fund manager. There are typically several types of fees charged including those paid to the manager for services, fund expenses and indirect costs such as those paid for commissions. Insist on full transparency with respect to fees.
Technical Skills = Key
Trading is competitive and today’s leaders know how to take full advantage of advanced technology, including artificial intelligence, in the quest for strong investment returns. Incorporating technology effectively as part of the trading process has proven to help grow portfolios with an asymmetric return profiles and definable and downside risk to capital invested. By utilizing proprietary artificial intelligence and algorithmic approaches that incorporate overlay and absolute return strategies with distinctive methodologies it is possible to achieve great returns. Outdated technology, on the other hand, is a red flag that puts traders and investors at a disadvantage.
As an example of top trading systems at work, consider that advanced algorithmic trading strategies are now transforming the way Forex strategies add value. As a result of impressive advances in artificial intelligence and algorithmic approaches, trading in the gold, silver and currency spot markets is now more popular than ever as a way to achieve strong returns. As evidence, Forex trading now represents about $5.3 trillion a day in the markets, which is significant, and likely the largest market in the world that many people have never heard about. More and more smart managers are realizing that they need to capitalize on these technological advances to stay in the race.
Emotional IQ is Paramount
Traders who have a high emotional intelligence (EI) or emotional quotient (EQ) are able to understand their own emotions, as well as other people’s emotions, and rely on that knowledge to guide daily behavior patterns. This helps make the trading process more effective in that their ability to stay balanced and focused contributes to wise decisions. Utilizing trade automation that employs strategies of Superior EI & EQ yields immense strategic advantages.
When the markets are volatile, it’s easy to give way to emotions and forget to act logically when entering or exiting a trade. It’s imperative to understand that volatility can be used to one’s advantage if you are able to rely on your EI to remain calm and focus on the best strategy for each unique situation. However, the component of speed is also critical, which is never the friend of the emotion. Those who are trading without the aid of automation, will become less and less relevant over time.
In summary, when evaluating a manager’s investment edge pay close heed to whether and how the firm is using top quality information and how technology provides it with an edge over the competition.
For further information, visit www.mediatrixcapital.com or call 1-800-905-1006.
Disclaimer
In no event should the content of this material be construed as an advertisement, express or an implied promise, guarantee or implication by or from Mediatrix Capital Inc. (MC) or any of its partner or subsidiary companies. This is not an attempt to sell or solicit any security and should not be taken as such. The content of this document is for informational purposes only. Potential Accredited Investors are advised to carefully read the Disclosure Documents to determine whether a managed investment in MC is consistent with their financial situations and investment objectives. Past results are no guarantee of future performance. Mediatrix Capital is a foreign corporation based in Nassau Bahamas, and does not operate within the United States.
Read Next
