Frequently Asked Questions
How much does it cost? The cost is $395 for an annual subscription – think of it as a few dollars per client to improve their long term returns, exploiting a previously overlooked, mundane task.
Do you need my clients’ statements? We do not. Strategic Alpha generates alpha by applying our algorithms, which are based on the risk factors common in all retail portfolios. As market factors create opportunity, we suggest allocating away from relative winners, toward relative losers. As such, as long as your clients aren’t 100% equities or 100% fixed-income, we can help them, and our system applies to all other combinations and risk tolerances.
We will suggest rebalancing all of your clients at the same time, regardless of their strategic allocation, because strategic allocations are products of risk-tolerance, and our system is a product of market factors. Your 50/50 clients will derive a greater benefit from Strategic Alpha than your 90/10 clients, but they will all get the maximum benefit possible, given their strategic allocation, by rebalancing at the same time.
How frequently will I be rebalancing? Relatively infrequent rebalancing provides the optimal blend of “letting your winners run” and “taking profits”. Over the sixty years of data we’ve studied, you would have only rebalanced 53 times – a little less than once a year on average, although in any given year, you may have rebalanced up to three times, dependent on market conditions. And again, our approach has outperformed the strategy of "rebalancing on the same day each year" by over 80 basis points per year on average, during a 60-year backtested period.
Why hasn’t this been exploited / who is your competition? We contend that you haven’t seen a product like this before because of misaligned incentives. No asset manager is going to suggest rebalancing away from their product, but they will recommend liquidating their competitors’ product to allocate to them. In addition, most firms try to add value by making tactical predictions to generate alpha, for which they are rarely held accountable. Rather than predicting the future, we are simply looking for specific outsized moves in risk factors common to retail portfolios and adjusting once they have occurred.
My firm has a sophisticated approach that recommends rebalancing when equities exceed a 5% overweight – can you beat that? While that is more sophisticated than “once a year”, that approach implicitly assumes volatility is constant over time, which we know is false. A 5% underweight during 2008 is very different, in volatility terms, than a 5% underweight in 2013’s low volatility regime. Strategic Alpha’s system adapts to changing volatility to create additional alpha – benefiting you and your clients. We’ve studied all possible combinations of overweight and underweight thresholds, and our system has historically outperformed them all, on average by 60 basis points per year.
How do I get started? Click JOIN on the main page or in the header selections to subscribe for one year. You will receive an email from us immediately confirming your member status. Then, you will hear from us on a monthly basis, letting you know where we are relative to potential rebalancing events. Once an event is within a day’s notice, we will contact you via phone and email to make you aware. At that point you can choose to act on our advice, use it as a reason to reach out to your clients,, or ignore our recommendation.