How is Time Allocated to Different Activities in Our Investment Method?

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Executive Summary

We spend time on two primary things in our investment method.

Introduction

Some of the most important questions are how to select investments. In this article, we will cover a process we have developed.

*Note

This article is only part of our internal analysis of investing and is to communicate with people we know. We are not writing this to attract investors, and we are not giving investment advice. This is just a convenient way to document our analysis which can then be easily shared and easily updated.

Adding Investment Vehicles And The Method Used for Selecting Them

Analyzing investment vehicles (IV) takes a lot of time. There are a lot of factors to review. One example is the environment.

Option #1: Selecting on the Basis of Recent Performance Increase

One way to select IV for entry into the IV group is to sort a database of IVs by recent performance increase which is easy to do using different screening software. A very recent performance increase picks up improvements that have the potential of extending into the future.

Option #2: Selecting on the Basis of Custom Factors

For example, ETF.com allows one to create custom filters for ETFs. For stocks or other investment vehicles, there are similar sites.

In one filter at ETF.com we created we selected for 1-month return combined with efficiency and readability. Any combination is necessary. ETF.com has around 25 different filtering characteristics that can be used.

The negative of ETF.com is that while one can use different filtering characteristics, they cannot be combined to perform flexible sorting. Instead one can only sort by one characteristic, while only “seeing” what the other characteristics are.

The Time Taken in Various Investment Activities: Analyzing New Vehicles and Monitoring Our Automated Trading Recommendation

Analysis of the initial group of IVs to be analyzed takes time. However, once the “vehicle group” has been selected, one can run mathematical script combined with several other filtering values to get into and out of the individual vehicle group. This is what we call the Monitoring the Automated Trading Recommendations (ATR).

That part can be done quickly. That is, the process for trading decisions becomes automated.

As outlined in this method, there are really activities that take time.

The first is analyzing new vehicles to be added to the group.
Monitoring the ATR for trading signals.