Weekly market opportunities in T-Advisor: the best on February, 20th

T-Advisor updates weekly a list of market opportunities from several stock exchanges around the world. We sum up a selection of the best ones:

EUROPE

  • Tomra (Oslo). The largest reverse vending machine (RVM) producer globally and leading sensor-based machines for sorting and recycling.

Tomra main figures in T-Advisor

Tomra chart in T-Advisor

AMERICAS

  • Aon Corp. (NYSE). A company with business in risk management, insurance and reinsurance brokerage, investment banking, human resource solutions and outsourcing services.

Aon Corp main figures in T-Advisor

Aon Corp. chart in T-Advisor

ASIA-PACIFIC

  • Wesfarmer (Australia). An Australian conglomerate with interests in retail, chemicals, fertilisers, coal mining and industrial and safety products.

Wesfarmer main figures in T-Advisor

Wesfarmer chart in T-Advisor

Find more opportunities from the main exchanges in the world on our module “Market opportunities” in T-Advisor.

Comparing my assets with its benchmark: some figures for analysis

Comparative figures asset benchmark

As investors, we look for the best performance. A good performance is not only an absolute figure, but also a relative one, when we make comparisons. For instance, if a share in our portfolio has a performance of 10% in a year, we can think that it is a nice number, in absolute terms. But if the reference index of the share has performed a 15%… well, it is not so nice. That is why it is interesting to take into account some figures to understand if our securities have a good quality compared with their benchmarks:

  • Relative trend of the security versus index: it compares both behaviours. If the figure is positive, the security is strong versus the index. If it is negative, there is a weakness. It is one sign to detect if our stock or fund is performing properly against the index.
  • Tracking error: this indicator measures the deviation of the difference in daily returns of the security and the benchmark. A higher figures shows that the daily returns of the security has a larger difference compared with the daily returns of the index.
  • R 2: it measures the similarity of the daily behaviour of both the asset and the index. If the figure is near to 1, there is a strong parallelism. If it is near 0, there is no relation.
  • Correlation: if R 2 measures the similarity of the behaviour, this provides more specific information. If the figure is near to 1, there is a positive correlation (both move identically in the same trend). If it is near to -1, the correlation is negative (both move identically in opposite trends). If it is near to 0, there is no correlation.

R 2 and correlation are very important to find assets not linked with the benchmark if its evolution is negative, for instance, when the index drops. On the other hand, it is also interesting to find correlated assets when the index soars.

  • Alpha and beta: both are quite important to measure the outperformance and volatility of the asset compared with the benchmark. We have an extended explanation in this post. Typical investor behaviour is looking for assets with good alpha.

Of course, the analysis of a single reference is not enough to get an idea about the relationship between the asset and the index. We have to look at all data and connect them to understand in a right way if we should put our money there or just go our quickly.

Weekly market opportunities in T-Advisor: the best on February, 13th

T-Advisor updates weekly a list of market opportunities from several stock exchanges around the world. We sum up a selection of the best ones:

EUROPE

  • Inmobiliaria Colonial (Madrid). One of the main Spanish real estate corporations.

Inmobiliaria Colonial main figures in T-Advisor

Inmobiliaria Colonial chart in T-Advisor

AMERICAS

  • Finisar (Nasdaq). A manufacturer of optical communication components and subsystems.

Finisar main figures in T-Advisor

Finisar chart in T-Advisor

ASIA-PACIFIC

  • Zhejiang Expressway (Hong Kong). An infrastructure company engaged in investing, developing and operating expressways in Zhejiang Province, China.

Zhejiang Expressway main figures in T-Advisor

Zhejiang Expressway chart in T-Advisor

Find more opportunities from the main exchanges in the world on our module “Market opportunities” in T-Advisor.

How to understand the figures of my portfolio to obtain better results? (I)

It sounds very nice when you think that you have your own investment portfolio. It is an important step to improve your finances and get your goals. The question is that a portfolio has its own life since its inception and your responsibility as investor is guiding the portfolio to your interests. What are the signals that you have to follow?

Well, there are many figures and parameters to measure the quality of your portfolio, but we will select the main ones in order to get the most important data:

  • The performance evolution: the figure alone is not enough, because it has to be put in comparison to others. We recommend comparing it with the smart benchmark. This comparison provides the view to understand if we have chosen the right assets or not. For instance, this example shows that we are far from the benchmark and there is a wide improvement to manage.

portfolio performance in T-Advisor

  • The weight of the assets in your portfolio: it is also relevant to understand the allocation. If we have a concentration in a country or a sector, there is a high risk to suffer from instability, if the trend changes. Diversification reduces risks, but we can have some assets with lower returns. A good analysis can help us look for similar assets with better figures in order to rebalance the portfolio.

weight of assets in a portfolio

  • The relationship between performance and volatility: first of all, volatility does not mean necessarily more risky, as we have already commented. However, we can understand the connection between performance and volatility through the Sharpe ratio. This figure shows how profitable an investment is related to the historical volatility. The higher the ratio is, the better the investment is… but this idea is not totally right if we do not compare two assets. You can find two assets with similar ratios but with different figures. We have to look into the numbers to understand if it has a high performance with a high volatility.

Portfolio sharpe ratio

There are some other figures that we will soon comment.

Weekly market opportunities in T-Advisor: the best on February, 6th

T-Advisor updates weekly a list of market opportunities from several stock exchanges around the world. We sum up a selection of the best ones:

EUROPE

  • Topdanmark (Copenhagen). The second largest insurance company in Denmark.

Topdanmark main figures in T-Advisor

Topdanmark chart in T-Advisor

AMERICAS

  • LATAM Airlines (Santiago de Chile). A Chilean airline company resulted from the merge between LAN and the Brazilian TAM.

LATAM Airlines main figures in T-Advisor

LATAM chart in T-Advisor

ASIA-PACIFIC

  • ICICI Bank (Bombay). The second largest Indian bank in terms of assets and the third largest in terms of market capitalisation.

ICICI Bank main figures in T-Advisor

ICICI Bank chart in T-Advisor

Find more opportunities from the main exchanges in the world on our module “Market opportunities” in T-Advisor.

Ideas to survive with your investments in political risky times

Investments: bearish against bullish

The current year has been commented several times as a year in which political risks will play a role: Brexit, Trump, elections in France and Germany, amongst others. We usually think in other kind of risks when we speak about investments, but in this case it is possible that we have to consider the political factor.

Anyway, we want to obtain the best returns with the lower risk. How could you move your assets in 2017 with this scenario?

First of all, check yourself. No, we do not speak about your health, but about your financial needs and plans. Do your budget, organise a cash flow, analyse your expenditures and think about your financial goals.

Secondly, analyse quietly your portfolio. Is it correctly diversified? Have you recently checked the evolution and consider a rebalance? It is important to take into account that diversification is not a matter of number of securities or different kind of them (equities, fixed-income…). It has more to do with avoiding correlations and considering factors. What does factor here mean? Think about that you have different kind of securities from UK. If all your investments are connected with this country, you have the Brexit factor and this political issue will condition the returns. That needs a wide view over the reality.

Thirdly, in order to choose the best assets for your portfolio in uncertain times, remember to check some figures, as:

  • Trading volume and liquidity: it is very relevant that the asset has a high trade rate and it is easy to sell, in order to avoid counterparty risks.
  • Volatility: the higher it is, the higher is the risk that you have to deal with deep price changes.
  • Past performance and bootstrapping: it is true that past returns do not guarantee future ones, but an analysis of the past trend combined with a forward testing with a bootstrapping tool can be helpful to select better securities for your portfolio.
  • Correlation with its benchmark: this is quite important, even more if the market is risky.

Finally, the main rule for investors in uncertain times (as we are living now) is common sense. Invest only the money left, not the amount to pay your mortgage, think about how regular and safe are your incomes and be reasonable with your goals.

Download T-Advisor 3.0 for your iPhone now

T-Advisor, your app to monitor and manage your portfolio investments, has already the new app for iPhone in the AppStore. This is our brand-new app that substitutes completely our older one. The new app provides you an improved version of all the tools that you already enjoy in T-Advisor. Just take your iPhone and enjoy the investment experience.

New T-Advisor app for iPhone 1

The screens have a new more user-friendly and flat design, easy to navigate and find all the information that you require for your investments. You can customize your profile uploading your most preferred picture and identifying by your own nickname. You can also obtain ratings from other users to improve your reputation in the community.

New T-Advisor app for iPhone screenshot

Our social and gamification features provide you the chance to compete and compare you results with other members of the T-Advisor investment community. Get medals for every achievement that we propose you! The more medals you obtain, the higher position in the ranking you get. You can set into private or public your portfolio to share just some details of your investments with other community members. In the case of your portfolio is public, you can get followers.

New T-Advisor app for iPhone screenshot 2

New T-Advisor app for iPhone screenshot 3

The new T-Advisor app for iPhone maintains all our traditional tools to manage and monitor your portfolios:

  • Full reports of your investments with all the main figures and charts to take relevant decisions.
  • T-Reports from thousands of securities to assess the best ones for your investments.
  • Our alerts module to set all relevant messages to react to any market movement.
  • A list of investment opportunities and our model portfolios that you can clone in a click.

New T-Advisor app for iPhone menu

Usability has been one of our more important developments, so that investments can be perceive as more friendly. Managing your money should be also attractive! Navigate over the menu just with your thumb in short clicks.

Discover T-Advisor 3.0 for your iPhone and download it now from the AppStore. Enter, browse and discover all our new features and what technology can do for your investments. Join our investors’ community!

What does portfolio optimisation mean?

Think about your portfolio. It does not perform as you would like and you do not know how to implement changes to improve the returns. Should you read all kind of reports? Of all possible assets? That’s nonsense. There should be a method to optimise and change efficiently your portfolio. There is actually and method: portfolio optimisation.

When we talk about it, it means the process of choosing the weights of different assets for your portfolio in order to obtain the best possible returns compared with similar portfolio compositions or risk profiles. The main measures taken into account are the expected returns and the expected volatility. Optimisation systems include limits of accepted volatility and weight per assets.

The system is linked to the Markowitz Efficient Frontier model that pretends to guide your investments maximizing your performances and reducing the risk. The main point that supports this model is choosing low-correlated or uncorrelated assets. Smart diversification is the idea behind it. An efficient portfolio means a well-diversified one.

Portfolio optimisation efficient frontier

Optimisation systems are professional tools to improve the portfolio results, but it has been implemented in T-Advisor for individuals. It is not easy, because you have to play with the following indicators:

  • Asset correlation
  • Maximum volatility
  • Expected return
  • Maximum weight per asset

The smart combination of the four indicators provides the success of the investment. They can change depending on your risk profile, but accepting a higher risk does not mean being suicidal.

Portfolio optimisation result charts

There is also another very important point: the costs. If you optimise your portfolio and follow the results of the optimiser tool, you have to rebalance your portfolio. A rebalance means trades to buy and sell in order to compose the portfolio following the optimisation indications and… it has costs. However, we have to remind that investments are for long-term and rebalances should be executed every certain time. In these cases, costs can be balanced out with the improvement of the returns. If you are a day trader, then forget this, because you are other kind of investor.

Weekly market opportunities in T-Advisor: the best on January, 23rd

T-Advisor updates weekly a list of market opportunities from several stock exchanges around the world. We sum up a selection of the best ones:

EUROPE

  • Wolters Kluwer (Amsterdam). A global information services company focused on legal, business, tax, accounting, finance, audit, risk, compliance, and healthcare publications with operations in 150 countries.

Wolters Kluwer main figures in T-Advisor

Wolters Kluwer chart in T-Advisor

AMERICAS

  • Copec (Santiago de Chile). A Chilean energy and forestry company with a chain of gas stations throughout Chile.

Copec main figures in T-Advisor

Copec chart in T-Advisor

 

ASIA-PACIFIC

  • Eczacibasi (Istanbul). A large industrial group with several business branches, mainly building, consumer and healthcare products.

Eczacibasi main figures in T-Advisor

Eczacibasi chart in T-Advisor

Find more opportunities from the main exchanges in the world on our module “Market opportunities” in T-Advisor.

The results of the T-Advisor model portfolios in 2016

T-Advisor, as wealth management solution for individuals and professionals, has not only tools for own investments, but also proposals to follow or even copy. That’s why our system has its own model portfolios. They are nine: five related to risk profile (from aggressive to very conservative) and five related to countries (Germany, UK, Spain in Europe and Mexico and Nasdaq 100 in the Americas).

How do they work? We select between four and six ETFs for the risk-profiled portfolios and up to ten stocks for the country portfolios. The main point for us is capital preservation. That’s why our results, when they are negative, are better than the markets. To obtain those results, we rebalance the portfolios every two months. These rebalances let us improve the results, as we exclude the positions more affected by market negative waves and substitute them for better stocks or ETFs. Diversification is also part of the strategy. We select the securities with the best score and relevant figures to obtain the best results.

These are the results for 2016 for our risk-profiled model portfolios:

1-Y-return 2016 1-Y-return 2015 Volatility Sharpe ratio
Aggressive

5.85%

-2.53%

12.51%

1.51

Dynamic

5.29%

1.47%

11.14%

1.52

Balanced

1.79%

3.53%

6.18%

1.42

Conservative

2.68%

1.52%

2.82%

1.35

Very conservative

0.90%

0.80%

2.07%

0.55

The figures were collected on January, 2nd, and we compare the results of 2015 and 2016. There is a general improvement (except the balanced strategy, although it is positive anyway). We have to remember that the year was quite unstable in the markets, as there have been several surprises that affected negatively. Despite this instability, none of our strategies closed with negative returns.

And now the results of our country portfolios:

1-Y-return 2016 1-Y-return 2015 Volatility Sharpe ratio Index
Germany

41.37%

44.70%

14.01%

6.98

6.87% (DAX)

Spain

1.31%

5.74%

16.17%

2.13

-2.01% (Ibex)

México

14.58%

23.96%

13.98%

5.61

+6.20% (IPC)

Nasdaq 100

24.68%

2.97%

9.58%

4.71

+7.50% (Nasdaq)

UK

9.03%

18.32%

15.99%

4.69

+14.43% (FTSE)

Except the UK portfolio, our strategies outperformed their benchmarks, but even the British one obtained a quite good return. The best performer was the German strategy again and the worst was the Spanish, but in this last case, the benchmark Ibex finished with a negative result.

Learn more about our portfolios and the assets included in our platform. Aren’t you tempted to clone them? We have a tool to let our users do it. Let’s try it and compare the results with your investments!