SkyOak’s Asset Management Group mitigates risk while trying to capture the market’s upside movements.
Our Asset management program Risk Averse Actively Managed Portfolio Strategy or RAAMPS® uses both fundamentals and technicals during a four-step process to create alpha while mitigating risk. The first step of screening provides groups of stocks with minimal correlation to each other. This allows us to create base portfolios which we can micro-manage. We then combine the base portfolios to create the blended RAAMPS portfolios. The second step, ranking, is key to our process and performance. We use an algorithmic scoring system that takes the screened stocks and assigns them points depending on the level they accomplish a designated condition.
Now that we have identified “top companies” through the screening and ranking process it’s time to look at their technicals. In our third step, trading, we incorporate a proprietary momentum trading program that triggers buy and sell signals. This leaves or places companies on the sideline that have downward or neutral momentum and buys into or opens positions on the companies whose prices are trending upward. If the entire market goes into correction mode we would sell our positions. Thus remaining in cash until the momentum indicates an upward trend.
Lastly, our final step, refreshing, allows us to replace the “weaker” companies (those on the bench) with “stronger” ones using the screening and ranking steps outlined above. We have found this process to be highly efficient asset management, repeatable, scalable, and mitigates the human emotion element. Historically on a monthly basis, we have captured 121% of an “up” market but only 46% of a “down” market. For more information please go to our website: Raamps.com.