Investing with Artificial Intelligence may unlock consistent outperformance, challenging even the S&P 500’s returns. Featured Forbes article.
Copyright: forbes.com – “AI And Investing”
Neither Google, nor Microsoft, Amazon, or Tesla – none of them beat the S&P 500 each of the last 3 years. Individual stocks just have a hard time consistently beating the market (not to take away from these venerable high flyers – each has, of course, outperformed with incredible long-term returns. Consistent outperformance is different).
Can a machine or AI be used to beat the S&P 500 consistently?
Ask any serious investor or portfolio manager, and they’ll tell you it isn’t easy to beat the S&P 500 – and few, if any, have been able to do it year after year.
What about the last 3 years – through a multi-regime market? The last 3 years were like few others in market history and included pandemic stimulus and 0% rates war, now two sky-high inflation, and then a Fed rate-hike cycle with rates now close to 5%.
Fact. Well, the Trefis high-quality portfolio (HQ) was a humble start – no frills, first money invested in the middle of a raging pandemic in September 2020. It has produced more than 1,000 basis points of outperformance* over the last 3 years. HQ has beaten the S&P 500 each year – 2020 partial year, 2021, 2022, and 2023 year-to-date. If you know many funds – in fact, any fund – that achieved this, please do send them along to us, we’re always keen to learn and improve!
Below, we share more in 3 areas: Why HQ worked? What’s been our broader learning, specifics of our approach, our journey? What’s next?
Thank you for reading this post, don't forget to subscribe to our AI NAVIGATOR!
So – why did HQ work? Start with the basics
We started with a simple belief. A belief that a stock’s attributes like defensible revenue growth, profitability, balance sheet discipline, and reasonable valuation – just don’t get old. Curious money managers often wonder if there’s more to it – and of course, there is. However, following even these consistently was hard for us. The temptation to buy more growth in Zoom and Peloton stock at a higher price, or while turning a blind eye to the balance sheet in another value stock was irresistible. We stuck to a systematic, data-driven process.[…]
Read more: www.forbes.com
Investing with Artificial Intelligence may unlock consistent outperformance, challenging even the S&P 500’s returns. Featured Forbes article.
Copyright: forbes.com – “AI And Investing”
Can a machine or AI be used to beat the S&P 500 consistently?
Ask any serious investor or portfolio manager, and they’ll tell you it isn’t easy to beat the S&P 500 – and few, if any, have been able to do it year after year.
What about the last 3 years – through a multi-regime market? The last 3 years were like few others in market history and included pandemic stimulus and 0% rates war, now two sky-high inflation, and then a Fed rate-hike cycle with rates now close to 5%.
Fact. Well, the Trefis high-quality portfolio (HQ) was a humble start – no frills, first money invested in the middle of a raging pandemic in September 2020. It has produced more than 1,000 basis points of outperformance* over the last 3 years. HQ has beaten the S&P 500 each year – 2020 partial year, 2021, 2022, and 2023 year-to-date. If you know many funds – in fact, any fund – that achieved this, please do send them along to us, we’re always keen to learn and improve!
Below, we share more in 3 areas: Why HQ worked? What’s been our broader learning, specifics of our approach, our journey? What’s next?
Thank you for reading this post, don't forget to subscribe to our AI NAVIGATOR!
So – why did HQ work? Start with the basics
We started with a simple belief. A belief that a stock’s attributes like defensible revenue growth, profitability, balance sheet discipline, and reasonable valuation – just don’t get old. Curious money managers often wonder if there’s more to it – and of course, there is. However, following even these consistently was hard for us. The temptation to buy more growth in Zoom and Peloton stock at a higher price, or while turning a blind eye to the balance sheet in another value stock was irresistible. We stuck to a systematic, data-driven process.[…]
Read more: www.forbes.com
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