As an investor, you should have some idea if your results are due to luck or skill. This is where performing out-of-sample studies, stress tests, and cross-validation can help you characterize your trading algorithms as robust – or “pro-bust”.
But as a prudent investor, you should also imagine what the future of the market will look like and if your strategies can handle the future because as we all know, “past performance does not guarantee future results”. So, let’s imagine a brave, new world – not of butterflies and dandelions – but of a much tougher investment environment with increased volatility and decreased expected returns – just like all the pros on Wall Street are concerned about today.
Luckily we don’t have to imagine. Today’s technology allows us to randomly sample volumes of empirical data and create alternate universes with worse distribution location, dispersion, and shape including mean return, kurtosis, skew, and standard deviation in all asset classes – than we’ve ever seen in the past. Then we can test to see how a 60/40 buy and hold strategy would compare to our current investment models within this darkened market environment with enough Category 5 hurricanes and sigma events to scare the bejeezus out of any market participant. Having access to a financial ark that can protect and grow an investor’s capital can make all the difference in the world.
Physician Capital Partners is a low-fee, autonomous, liquid-alternative robo-advisor offering high-performance, quantitative hedge fund strategies designed to protect and grow capital regardless of the direction of GDP and inflation. For family offices, institutions, non-profits, and individual investors who want an alternative asset with value, dynamic algorithms, and low equity correlation.
Physician Capital Partners 10440 N. Central Expressway #800 Dallas, Texas 75240