Quantitative Investment Management - The Low-Stress High-Yield Approach to Investing

Are you sick and tired of being stressed out by the stock market's every move? Have you had it with losing big money every time the market turns south? Read on to discover quantitative investment management, also known as the absolute return investing, the low stress and high yield approach to investments. Most people invest with their gut. And their gut is an awful investment advisor. To make money in the stock market, you need to buy low and sell high. But that's not how your gut works. It gets excited when the market goes up and wants you to start buying when the stocks are moving towards their highest prices, and when they come crashing back down, it wants you to sell. The result -- you stand to lose a lot of money. Enter the quantitative investment approach. It takes the gut out of the equation. Instead, you're dealing with sophisticated computer models and the input from experienced investment advisors. Of course you will need the right kind of computer models. And you definitely need the right kind of advisors, ones who are working entirely on your behalf, i.e., fee-only advisors. And make sure that your advisor's investment philosophy is based on quantitative investment strategies, not buy and hold, and that he is not pushing mutual funds. There are two parts to the quantitative investment approach. Its sophisticated computer models analyze essentially two crucial components that contribute to investment success: the market and individual equities. 1) The market The computer models analyze the market based on countless indicators and data to determine where the stock market is headed -- up or down. So it can tell you whether it's a good idea to be in the stock market at any given moment -- or not. There are alternatives, after all. And cash gives you the most flexibility. So if the market is not the place to be, cash keeps your money safe for the time being, yet it also allows you to put it to work the minute the market turns around again. In a nutshell, a computer generated system will tell you when to invest -- or buy -- and when to get out -- or sell. And it takes all the emotions out of it. You follow the calculations, and the results tend to be far more accurate than your gut could ever be. And far more rewarding. 2) Selecting equities You also need the second key component of a successful quantitative investment management approach to really make it work. And that part involves selecting the specific equities in which to invest. After all, you need to know where to invest the money when it's time to be in the market in order to get good results. And that's where quantitative investment management approach really shines. Traditional mutual funds tend to have lots of clunkers mixed in with the good funds. In fact, they give the 80/20 rule a whole new meaning. With the quantitative approach, the computer selects the best of the best, which results in a portfolio of winners. The computer will also continue to monitor those equities and indicate that it might be time to sell if any of them should stop performing to specifications.