Modern-day technology is changing the way professionals interact with the investment markets. It’s not just about information. It’s about getting the right information at the right time.
Where Artificial Intelligence meets Advisor Intelligence
Every financial instrument has its own unique price and risk characteristics. Prices rise and fall based on the prevailing conditions of the markets. Most of the common research statistics (beta, sharpe ratio, etc) are built off of this specific data.
At its core, the BigFoot System is a research platform. Where BigFoot is different — and where BigFoot can make a difference for advisors — is the research is completely unbiased and specific.
Unlike most research, BigFoot offers specific actionable instructions: Buy, Hold, or Sell.
BigFoot utilizes quantitative algorithms to analyze specific assets and determine when to take action. There are multiple algorithms designed to work in varying market conditions. Our Artificial Intelligence system analyzes all of the different algorithms in real time and automatically selects the most effective system for the current market environment.
The BigFoot System enables advisors to add value as money managers while still focusing on the client.
Eliminate the guesswork and subjectivity in your investment process. Build robust watch lists that actively notify you when a position should be bought or sold. Generate client-facing reports with your own logos and firm information about each position.
The entire trading history for any position is clearly visible. Search the system for your favorite stock, etf, fund, or variable annuity sub-account and see how BigFoot would have traded the position. Compare it to a buy-and-hold strategy. See how many winning or losing trades the system generated. The track record is fully transparent. We have nothing to hide.
Read below to see some of features explained more in depth.
At its core, BigFoot Investments is a quantitative research platform. Sure, there are other great features in the system. But the bread and butter is our ability to give you a definitive buy, hold, or sell recommendation backed up by historical trade performance. The system is fully transparent. See every trade recommendation we’ve ever made. How many winning trades were recommended? How about the losers? How big were those losses? Does the system produce profitable trades more than 70% of the time? How big are the wins vs the losses? By following a disciplined trading methodology that behaves the same way every time, we can develop a statistical profile of each investment. This statistical profile indicates the probabilities of trade outcomes relative to historical trades. And while past performance may not guarantee future results, it doesn’t hurt to know if they are in your favor.
There are several different mathematical ways the BigFoot system generates trading signals. Each signal uses different criteria designed to work in specific market conditions. Some thrive in volatile markets, others work better in trending markets, while others use specific event triggers. Of course, no trading system can be perfect in every environment. This is why BigFoot utilizes an artificial intelligence process to determine which mathematical system is likely to perform well in present market conditions. There is no guesswork involved. The system automatically calculates and recommends which trades have the highest risk-reward-probability ratio. And yes, you can even manually override the artificial intelligence process and manually select a trading system. After all, we’re talking about your process and your clients here.
Our Portfolio Architect Platform gives you the ability to create your own blend of stocks, mutual funds and ETFs. Manage the portfolio using BigFoot’s trade signals or override the signals by entering your own trades. Detailed reports show past performance, invested portfolio levels over time, and a range of portfolio statistics.
When you win a new client, you do not necessarily need to sell their entire portfolio at once in favor of your model. Many times, the client has some “good” positions in their existing portfolio. You owe it to your client to strategically exit their current positions in pursuit of the most optimum transition possible.
We can help. Call us up and we will use our system to help structure a plan to transition new accounts out of their current positions and into your model portfolio.
Algorithm is just a fancy way of saying decision system. BigFoot has several different decision systems that are used to help determine whether or not an investment should be owned, held, or sold. The beauty of an algorithm is that it is consistent. Consistent behavior can be evaluated and statistically analyzed. This is a big deal because we can validate whether or not the decision process is working. As you no doubt know, study after study shows that behavior (or more specifically, bad behavior) can significantly impact investor performance over time. Algorithms do not suffer from emotionally impaired judgment, so the past performance is statistically valid. In a sense, this is the same logic that casinos use against gamblers. They know that, statistically speaking, the odds are in their favor. Pair that with bad decisions by the gambler and the house wins. In our case, we are acting as the casino. We are not predicting the markets but rather developing a probability expectation for how our decision process — the algorithm — will perform given similar future events. That’s not to say that past performance has any bearing whatsoever on future returns. However, if the system has historically produced 80% accurate signals, and the wins are bigger than the losses, the algorithm’s decision process, at least statistically, in your favor.
One of the most powerful features of the BigFoot system is our Watch List. Like the other dime-a-dozen watch lists on the market, you can track a list of your favorite investments. Where BigFoot separates the wheat from the chaff is in the tracking criteria for those positions. The system allows the user to set alerts for all kinds of triggers — trailing stop losses, target price, trade signal changes, and more. The system also allows you to set customized ranking criteria for each position in your watch list. Want to build your own sector rotation model? How about sorting your holdings by user-defined relative strength criteria? Yeah… we do that. And the icing on the cake? You can build as many watch lists as you want. You can even set them up to notify your clients when triggering events occur. (Are you salivating about the idea of providing fee-based advice to accounts you don’t custody (what?)? Imagine taking your clients’ 401(k)s and building them customized watch lists that automatically notify them when a trade recommendation occurs. You’ve just automated your outside account management, and BigFoot can be your ‘foot’ in that door.)
Make mutual fund expense ratios a thing of the past by eliminating the middle-man. While most advisors steer clear of individual stocks in their investment strategies, BigFoot can help you stand out from the crowd. You can custom-build a program based on your own stock selection method, or you can follow one of our pre-built growth or dividend income strategies. We provide the blueprint, you get to take the strategy and make it your own.
BigFoot offers both the research and buy/sell discipline to help you manage a stock strategy. And our fixed subscription cost means your keep more of the fees you bill as your AUM grows. Say goodbye to 3rd party money manager fees and basis points for management.
We have an expression at BigFoot: it’s easier to climb out of the hole you don’t fall in. This is a funny way of saying that loss avoidance helps produce bigger long-term investment gains. The problem is that losses are not linearly related to gains. If an investor loses 50% of their portfolio, they will need to double their money — that’s a 100% return — just to get back to even. That can be a tall order. Now a 10% loss only requires 11.11% to get back to even.
BigFoot’s trading algorithms are designed primarily as loss reduction strategies. We believe it is impossible to perfectly time the market. However, perfect timing is not required. Simply getting it more right than wrong is the key. It is counter-intuitive in many cases, but long-term value is added by capturing more gains and reducing more losses over time. In fact, a portfolio that captures 80% of an upside move in a position, but only suffers 50% of the downside moves, would end up being more profitable than capturing 100% of both the up and downside moves.