Monthly Archives: January 2014

Are you financial advisor? These are your tools!

Financial Advisor functionality picture in T-Advisor

T-Advisor is a software suite with a wide range of different tools for investors. The aim of T-Advisor is providing accurate, updated and relevant figures and data for agents in the financial system. We do not only think in particulars or individuals, but also in advisors, who will have access to all tools and an enlarged set of services. We have developed powerful tools to help advisors provide the best service to your customers.

T-Advisor for financial advisors offers a customized asset universe, so that professionals can choose and change the portfolios depending the situation and taking advantage from the best performances. The access to historical data is enlarged up to 20 years, so that advisors can perceive detailed trends from the assets they are interested in. We also give the chance to manage up to 100 portfolios, which is a reasonable number to design different solutions depending the customers’ profile.

But our main strength is our financial planning tool. Advisors may set a goal for the different customers in the short and long term. The tool also provides a savings plan to obtain the projected performance. First of all, professionals can set the investor profile, depending the risks ready to be assumed. T-Advisor has defined 5 different profiles, from more to less risk aversion: very conservative, conservative, moderate, dynamic and aggressive.

After defining the profile, the financial advisor accesses to different products recommended for him or her. The tool shows many kinds of charts, as the asset allocation or the performance and risks analysis. For instance, T-Advisor calculates automatically average performances for different periods, volatility and value at risks, amongst other functionalities. At the end of the process, advisors obtain a proposal report about the designed portfolio for the customer.

Of course, T-Advisor lets the professional watch, follow up, analyze and rebalance portfolios. Our strength lays on our deep knowledge of advisors’ tasks, needs and interests. We have developed a tool adapted to their daily work, making it easy, automatic and with a high-quality information so that professionals can react immediately to any market change. We are aware that technology is at people’s service and T-Advisor has been developed at investors’ and advisors’ service.

Advisors and technology, the next alliance

Advisors ideas. Picture from T-Advisor

Advisory industry faces the challenge of technological evolution. Currently, customers are connected to Internet, they look for news in well-known media, comment articles from experts and (why not?) discuss the decisions of their advisors, because the follow the market.

Are advisors a kind of old-fashioned job or to be extinguished? Absolutely not. But the profession has to take into account some changes to deal with. First of all, advisors have to be on the social networks. Do you know that the use of social media increases with wealth? People are demanding not only for information, but also for a more often personal contact through the networks or communication software (think about Skype, for instance), not limited by a certain appointment in the office. If you are on, you are in.

But the biggest challenge is how to deal with online advice. The industry expects that this will be an important trend, as the biggest competitors will come from this side. That is a logical perception, taking into account that brokers expect to see mobile trading’s share rise to 21% in 2016. Particulars, common people, will have available powerful tools to manage their investments on their own, but advisors will learn to get technology as an ally, because software for advisors will be more useful and adapted to customers’ needs and expectations.

After this description, will the customer forget the advisor as a needed expert to choose the best for his or her money? No. Customers will take surely more decisions on their own, but they will always need an expert in a world with difficult products, as the finance world is. Recently, James Pershing, partner in SunGuard Consulting Services, said in an article (subscription required) that the point to be successful in the advisory industry is communication. How? Speaking the same language. And again, how? Easy, having the same screens, the same information, the same charts, the same figures, and helping your customer with your deep knowledge to get the best choices and obtain the highest performance.

Tools as T-Advisor has this focus: it does not intend to eliminate the advisor, but reinforce his or her job through versions for common people and professionals, so that all speak the same language: an efficient wealth management.

Market opportunities by T-Advisor: Juniper Networks

T-Advisor, through its tool Market Opportunities, has detected the company Juniper Networks, listed in Nasdaq as an opportunity for investment.

These are the main figures about performances and volatility in the last years:

Juniper Networks figures by T-Advisor

The technical analysis reveals also more data:

Chart analysis of Juniper Networks by T-Advisor

The chart shows the evolution in the last year:

Chart of Juniper Networks by T-Advisor

Finally, the risk analysis is as follows:

Risk analysis of Juniper Networks by T-Advisor

Juniper Networks was founded in 1996. It has more than 9.600 employees in 47 countries around the world. This technological company develops devices and services around networks (hardware, design and architecture, open platforms). Its revenue was USD $ 4.4 billion in 2012.

Quant model portfolios: a T-Advisor investment guide

Particular investors do not have often much time to monitor their investments. Sometimes, they open the software, play a bit with orders, buy this, sell that… but without a methodology, a periodical systematic and the right tools to obtain the required information to take the best decisions, this investor is possibly wasting time and losing money.

But what about if you have in your investment tool a reference to follow? These are the quant model portfolios in T-Advisor. Quant relates to quantitative analysis. This methodology is based on complex mathematic-in-finance calculations to measure risks, performances and volatilities. It provides a tool to analyse the best assets to invest.

T-Advisor has at users’ disposal 9 different quant model portfolios in two different groups. The first ones, depending from the investor’s profile:

Quant model portfolios in T-Advisor by investor's profile

The second ones, depending from the market:

Quant model portfolios in T-Advisor by market

As invertor and T-Advisor user, you can choose between your own portfolios or simply following these models. What are the main advantages? Our experts design these portfolios choosing different countries and currencies. Moreover, every option provides an optimal asset allocation depending your own interests or profile.

Our Research Department works hard amongst wide databanks to find trends and correlations. At the end, you obtain an active management not perceiving it. Of course, these portfolios are not static, but they are revised and rebalanced every two months.

The results of this intense work are shown in the next chart. None of our model portfolios registered losses and all of them have a low to moderate volatility.

Performances quant model portfolios

Value at risk: how much money could I lose?

In investments, the main threat is a negative change in prices. Suddenly, the price trend turns down and you do not check regularly your portfolio. After some weeks, you discover that your portfolio devaluated. How could I have prevented it? Of course, you could maybe follow more often the markets or delegate in an advisor. The third option is having the right information and figures to preview possible losses if you do not trade in the markets often and take decisions from them.

Value at risk (widely known VaR for its initials) is the help figure for it. Look at the following picture from T-Advisor with these figures:

Value at Risk in T-Advisor

“My portfolio” has an -8,17% VaR. What does it mean? VaR is a statistical measure. In this case, the information that you get from it is: you can lose more than an 8,17% in a year with a probability of 5% for this portfolio if you do not trade in this period. Reading it on the opposite: there is a probability of 95% that you could lose at the most an 8,17% in a year.

In T-Advisor you can also compare your portfolio VaR with the smart benchmark (read our previous post) and the markets in which you invested. For instance, the risk of this portfolio is less than the indexes where we have some investments.

Moreover, you can obtain this figure as a proportion (above) or in absolute figures (below) linked with the volatility.

Risk profile from T-Advisor

But what if I had an undiversified portfolio? How to find out the risk of diversifying against not doing it? T-Advisor shows you this comparison both as a proportion and in absolute terms. You can also obtain the earnings if you diversify your positions.

Diversification benefits in T-Advisor

Risk is the great foe for investors. Nobody wants to lose money in the markets, but sometimes it happens, because markets are volatile (read more in our post about it). VaR is an intuitive figure, easy to understand, and provides an immediate picture of the money that we are risking for a combination of different stocks or assets, not just one. Such figure lets us react and change our positions to prevent losses if we consider that we are playing hard.

Smart benchmark, an automatic reference for your investments

Investors do not focus just on one stock, but in many of them. Moreover, investments usually organise in portfolios with several kinds of assets: stocks, ETF, mutual funds… With such mixture, it is difficult to follow the composite performance, if the investor do not have available the right tool.

For these cases, we have to follow the benchmark. What does it mean? The benchmark is the reference for your portfolio. It is an easy figure to be reported whether your portfolio is on-track or in the opposite way to achieve your performing target.

Let’s have a look at this picture from T-Advisor:

Smart benchmark with other figures in T-Advisor monitor

What information do we have available? First of all, we have the performance of our portfolio from the beginning of our investments and from the beginning of the current year.  Below it, we have the benchmarks from the indexes where we have assets in our portfolio and… the smart benchmark.

Smart benchmark is a functionality provided by T-Advisor for its users. You do not have to calculate, because T-Advisor automatically shows the figure. What information do you get from it? It mixes the different indexes benchmarks in the proportion you have in the portfolio and obtains a composite benchmark. So, you can compare if you are on-track or far from the performance you are looking for and from the market trend.

But you get still more in T-Advisor with smart benchmark. You can also compare the portfolio risk with the benchmark risk, comparing performance, volatility, value at risk and shape ratio. These figures report accurately to take decisions about your own investments: am I wrong with my investments? What should I change?

Smart benchmark in portfolio risk T-Advisor monitor

Finally, it is to underline that T-Advisor has developed this tool so that every user has at his or her disposal an automatic reference to compare the evolution of his or her portfolio and take the best decisions to maximize the investments.

Our General Manager Jaime Bolívar talks about T-Advisor

T-Advisor, the advance wealth management software launched last year for personal investments, is a milestone in this kind of developments. T-Advisor General Manager Jaime Bolívar explains some details about the suite.

Question: Mr. Bolívar, you are also Techrules General Manager, a leading company that offers software solutions for the financial sector. T-Advisor is focused mainly in individuals. Why did you take this decision?

Answer: Techrules has more than 20 years of experience developing the best solutions for financial entities with a high success. Nowadays individuals have many channels to manage and decide about their investments, because they have a lot of information available through the Internet. But a lot of information does not mean being well informed. That was our point: organise and provide highly accurate and visual information, so that everyone could take the best decisions for their investments.

Q: There were already tools to manage own investments. What are the strengths that any investor can find in T-Advisor?

A: T-Advisor was conceived for individuals that even do not have deep knowledge in markets. That is why the suite is very visual and has many ratios to follow the performance and the risks of their investments. We are very proud about our tools of market opportunities, updated every week; our smart benchmarking tool, to help investors compare relative performances in their portfolios; and our quant model portfolios, defined by profiles and countries, so that a particular can join them. These quant model portfolios designed by T-Advisor are performing incredibly well: the weakest, for a conservative profile, produced a 5.3% return and the strongest climbed to a 69%, linked to the Nasdaq. And we are continuously improving, updating and creating new tools in the suite.

Q: What about investment information from different countries? Is that possible?

A: Of course, that is another of our strengths. You can find market opportunities in 29 different exchanges, from Europe to USA and emerging markets. Our watchlists provide assets from a wide range of indexes and institutional investors. And also our global trend tool shows performances in 32 different countries around the world. A particular investor can decide investments from his or her mobile in South Africa, China or US, if he or she checks in T-Advisor that the best opportunities are there. And they can do it through T-Advisor.

Q: Is it difficult access to T-Advisor?

A: Absolutely not. Just register in our website and begin to invest. Our customers can open a free trial account for three months. We are so sure about the quality of our suite that we know that, after this period, they will not be able to avoid investing with T-Advisor.

Technical analysis: a picture speaks a thousand words

The schools in finances, if we may speak about them, are two: fundamentalists and chartists or technicians. Both are quite different when they analyze and prospect market trends. Fundamentalists look into the conditions that produce a given price in a moment (for instance, interest rates for currencies or balance sheets in companies). On the contrary, technicians just consider the price without any economic or accounting figure and research into the trends of the pricing line in a chart.

Let’s look this example extracted from the T-Advisor app. If we select a listed item (in this case, Bank of America), we can choose different indicators from the software.

Selecting technical analysis figures from T-Advisor app

An example resulted from the selection of some indicators show us the following chart:

Technical Analysis Chart from T-Advisor app

In this chart we selected the pricing line since 2001 and the trending lines SMA (Simple Moving Average) for 20, 70 and 200 days. These lines let the investor or the advisor have the perception of how the price of this company is moving in the market.

What are the main advantages of technical analysis? Actually, this concept focuses just on price. So, as particular investors, we do not need to know deeply about economics. Secondly, charts give us easily and quickly the trend (upwards, downwards, sideways). Thirdly, we discover patterns, as technicians think that market actions repeat. Of course, they are not necessary easy to discover, but they exist. Finally, charts provide the investor a wealth of information just with an image and the right software.

Technical analysis has jumped with the development of computing and software tools based on this concept are a great help to success in the finance markets. Last, but not least, technical analysis is applicable to all kind of tradable products: stocks, bonds, currencies or commodities.

Are you new in finances? Do you want to learn more about technical analysis? This blog will publish regularly posts about the main concepts and vocabulary linked to it.

Emerging markets: risk with chances in 2014

Emerging markets Puzzle with Brazil, Russia, India and China flags by T-Advisor

Emerging markets compound an increasing number of countries in the last years. In the beginning, Goldman Sachs pointed them as BRIC (initials of Brazil, Russia, India and China). This successful combination enlarged joining to this group another countries: Indonesia, Korea, Taiwan, South Africa and Turkey. In the markets, they are divided between the “fragile five” (Brazil, India, Indonesia, South Africa and Turkey) and the “fab four” (China, Taiwan, Korea and Russia). The reason to build this both groups is linked to the current account position: deficit for the first ones, surplus for the second ones.

This point is quite important in the current financial situation and conditions investors’ decisions. The “fragile five” will suffer from the tapering begun by the Fed in December. The costs to finance their deficits will increase as the dollar will be more expensive and the US debt will require higher yields. Moreover, these countries will deal with elections in 2014. On the contrary, the tapering decision did not affect the fab four, which represent 50% of the MSCI Emerging Markets index.

What is the best in emerging markets? Just run away? Take the money and say goodbye? Schroders disagree with a pessimistic position about them. As this bank underlines, these countries have solid economic fundamentals and attractive valuations. However, tapering will create uncertainty in some countries, as it was mentioned above. Avoid an exposure to tapering-affected countries and overweight the other group is the point for the British bank.

Russia appears as a specially cheap country for investors, as Alken Asset Management recently stated. The situation is similar in India: low prices open great chances, but it depends on the election results, the economic expansion and the effect of the Fed tapering. In the case of China, the view is driven to sectors that did not outperform in 2013. Possibly, Brazil will suffer at most, as the widening current account deficit will affect the economic outlook, despite the positive impact of the Football World Cup in investment.

Invest in emerging markets is a risky game, but with productive incomes and profits if the right keys are played. In this case, macroeconomics will have a very important role in investors’ decisions.