Tag Archives: trend

Is my portfolio working or not?

Portfolio main screen in T-Advisor

Investors organise efficiently their investments in portfolios. That’s the rule, but the question is: how to follow up my portfolio? Can I preview somehow troubles in my investments? Which ratios should I take into account to set and allocate my assets?

There are some indicators that give us some clues whether we are right or wrong and the changes we have to decide:

  • Returns: of course, this is the first one. As investor, you do not have to be anxious about the short term, because volatility is our current rule. You should use a tool that provides you different terms in order to compare the evolution. However, you have to think about changes if the returns are negative in the middle term.
  • Comparison with other references: it is a good idea to compare the evolution of your portfolio with the benchmarks (an index or a smart benchmark). This comparison will help you evaluate a proportion of the profits or losses that you get and diminish or underline the importance of the result. For instance, if your portfolio losses 3% and your benchmark losses 5%, it is not so bad. You are better than the index, although you should consider change your strategy, it the negative trend intensifies.
  • Diversification: get charts about the proportion of the assets in your portfolio related to regions, currencies and asset category. A diversified allocation will help you avoid several risks.
  • Risk: this is actually the second most important indicator after returns. Analyse the volatility, the value at risk (VaR) and the risk contribution of your positions. A segmented analysis will focus better your next decisions. Should I keep, sell or buy? Another quite important figure is the Sharpe ratio to understand how interesting is assuming risks in order to obtain certain returns.
  • Trend: you should as investor use tools to get the portfolio trend, if bullish or bearish.
  • Portfolio and investor profile consistency: is your portfolio consistent with your investment profile, your risk tolerance and your expected returns? That is another question that you have to ask yourself.

You need tools to make a full analysis and obtain a whole view over your portfolio and take the best decisions to improve your results. It is important that you get unbiased indicators, watch risk and returns, understand everything and take rational decisions, never guided by a short term situation. At the end, it is not only about profits, but above all capital preservation. The T-Advisor platform offers these figures so that everyone can set and allocate assets their own portfolios in the most efficient way.

Volkswagen: the influence of management in the stocks

There is a continuous debate between analysts and investors who take into account different figures in order to decide where to invest: some prefer to obtain details about the turnover, the returns, the evolution of the demand in the sector, amongst others; some others prefer to analyse the evolution of the chart in the exchanges. Fundamental and technical analyses are the main systems for investors to try to know if the share is right to invest. But what if there is a sudden management mistake? What if the managers have lied in the business?

Volkswagen is a new case of wrong management with hard effects on the exchanges. The manipulation of the car engines with a software to cheat in the CO2 emissions was something unexpected, because markets accept that companies are doing a fair competition, that they are showing real figures of their business… In other words, trust is the base of markets and investors. If we look at the T-Report of Volkswagen, we find that the evolution of the share was not positive in the last year, but there is a hard break in September:

Volkswagen chart in year to date

A comparative analysis with Eurostoxx 50 shows also this break in the trend:

Volkswagen comparison with Eurostoxx 50

Another chart points out the relative position when performance and volatility are linked:

Volkswagen comparison with MSCI

Finally, all models show a deep negative trend in the future evolution:

Volkswagen trend models

The question is: what can an investor do? Unfortunately, no model and no analysis can preview unfair management before the truth emerges. The history of false figures or manipulation is long: Toyota and General Motors also hid defects in their engines, Enron or Gowex manipulated their balances and the profit and loss accounts… The court is the only solution to try to recover some of the losses in the investment. Volkswagen knows it and that is why the company set aside 6.5 billion euros to deal with the long demand list for damages, not only by consumers but also for governments. However, there is a bigger damage: the shadow over an industry.

Investor: watch these figures to select your assets

You are a new investor or with low experience in investments. You have available a good database to check possible asset to invest in, but which would be the right one? How can you select the most interesting assets for your goals? We recommend you to look into a database with high-quality reports about the assets. There you will find lots of information. Check the following figures to take a decision:

Figures to follow in investments

  • Performance: look at the historical performance. How good were the returns in the last months? And in the last years? It is true that past performances do not guarantee future results, but it show a trend about the long-term stability. It is not the same to get a share with positive and negative returns in different years than a one with regular positive returns.
  • Volatility: this is quite important. Volatility measures a deviation from a middle point. For instance, if the price goes up 4% one day and goes down 3% the following, the security is quite volatile. On the other hand, if the price goes up 0.2% three days and goes down 0.1% one day, it is less volatile. Take it into account depending your risk profile: if you are risk averse, you will not feel comfortable with a share that has high variations every day.
  • Trend: it is the development of a security in a timeframe. You have to consider the recent trend to decide to invest or not. A trend has a slope. If the slope is strong, it means that the trend has accelerated. For instance, if the slope is strong upwards, it can mean a bubble or that there is speculation behind the movement. On the other hand, if is very negative, it can mean a crisis in the company.

Chart to follow investments

  • A historical chart: an image is worth more than a thousand words. It is easy to detect the items mentioned above in a chart. The best one is an active chart where you can choose different timeframes.
  • Value at Risk (VaR): this is an advanced item, but very useful. What does it measures? The probability of losses in a timeframe. You will read “VaR one week” or “VaR one year”. It indicates that you can lose at maximum the written figure with a 95% probability. In other words: if you invest in that asset, you can earn, you can lose less than the indicated figure in the VaR, you can lose at maximum that figure with 95% probability and you can lose more than that maximum with 5% probability. These are the scenarios that you have to analyze. The highest VaR it is, the highest risk you accept.

This is the beginning. There are some more that we will comment in future posts. The T-Report in T-Advisor offers all these data. Check it in our platform.

T-Report, a high quality asset report as an investment tool

Figures and data are the main tool for investors to obtain good performances, but people don’t need only a collection of numbers, but an interpretation of them. Figures are useful when they are understood and let investors take decisions. In T-Advisor, we care about it with our T-Report, a full and detailed sheet with accurate and relevant data about thousands of assets. Let’s see what an investor may find there with an example: Apple.

First of all, you find the immediate figures about the stock: price, price change, volume, an assessment of the risk taking into account the volatility, the liquidity and our score. T-Advisor has developed its own scoring for all assets to provide investors an understandable way about the quality of them.

After that, you find the historical performance analysis. It is true that past performances do not guarantee future ones, but they show a relevant evolution to assess the interest for your strategy.

T-Report main figures

The following data are related to short-term trend. The system calculates the trend and the cycle phase to perceive if it is the right moment to enter (stay long) or wait, as the position says.

T-Report trend analysis in T-Advisor

Charts are also very relevant to perceive an asset trend. We provide in our T-Report several options to watch the chart and the evolution in the last five years. Anyone who wants to obtain deeper information may click on “View charts in charting area”.

T-Report charts in T-Advisor

Comparative tables are also useful to evaluate data. That is why we show the cumulative performance and different views from different technical models.

T-Report technical analysis in T-Advisor

Similarly, every T-Report compares the asset with the index reference to check if it performs better or worse. It also shows relevant figures as alpha and beta. It is to underline that the T-Report is full of hints that explain the meaning of all the data just locating the cursor on them.

T-Report risk and index comparison

In T-Advisor we consider that capital preservation is the main goal for an investor. The chapter devoted to risks analysis is wide, because we want to report properly about them to help investors preserve their capital. Volatility, VaR and retracement are the main figures. We also include a comparative chart that links performances and volatility from the assets and several indexes.

T-Report risk analysis in T-Advisor

Finally, if you are not satisfied, T-Report shows investment alternatives ranked by exchange and sector, so that you can find the one that fits your interests.

T-Report investment alternatives in T-Advisor

To sum up, investing is not a game. It requires time to analyze where we are going to allocate our money. Information is a main stuff to assess options and take decisions, but this information has to be properly and systematically organized. Our T-Report is the answer for these needs.

 

Stock trend: a view for investment opportunities

Free markets have a common point: prices are steadily changing. Sometimes they go upwards, sometimes they go downwards. Experts and analysts try to find a rule in these continuous changes. This rule is the trend.

The trend is the general direction of the stock (but it is also applicable for other listed assets, as ETF, funds or bonds, for instance) in a period of time. The investors’ profile and style will guide which time frame is important: for daily traders, they take into account short term trends, while a more traditional investor, who is saving for a long-term goal (studies for his or her children, retirement), the point is the tendency in a wider period.

If we consider a medium or long-term trend, the options are from very bearish to very bullish. In other words, from a strong downwards trend to a strong upwards trend. The middle point is the lateral movements, when the asset has no clear tendency.

In T-Advisor we consider the trend analysis as an important figure to take investment decisions. Our system has established a code with three arrows. Each arrow sums up the trend of the last three weeks. Sometimes, there is a combination of up and down arrows, which help the investor detect a change in the direction and react to the market movement.

Different trend signals in T-Advisor

To complete the trend analysis, it is necessary to know if it is strong or not to be prevented about how long it will probably last. The word “probably” is quite important. Analysts consider that the market has a cyclical behaviour and it repeats the movements every certain time, but the base is probabilistic: it could happen or not.

Trend strength in T-Advisor

The trend strength is the slope of the main trend. In this case, the analysis considers a long-term direction, avoiding taking into account short-term changes. The higher is the number, the strongest is the trend. In T-Advisor, this data completes the analysis of the trend signalled by arrows.

Portfolio score : your investing mark

Portfolio score by T-Advisor

When we were students, we received marks from the teachers in the exams. Sometimes it went fine, others not so good. In any case, the mark was an easy reference to know if we had passed or not. Why not using it in personal finances? That is the portfolio score in T-Advisor.

T-Advisor, as software mainly thought to control and organize individuals’ investments, was designed to be easy to understand for everyone, either the person had deep financial knowledge or not. We conceive the portfolio score as a personal reference that reports about the quality of our investments related to some measures. The marks are between 0 (the worst) and 10 (the best).

Portfolio score improvement suggestions in T-Advisor

How do you receive your mark? T-Advisor accounts:

  • Diversification: the more diversified portfolio with more positions, the better, as you reduced your risks.
  • Trend: a good score has a bullish trend, against a sideways or, even worst, a bearish.
  • Risk: T-Advisor compares your risk profile against the general portfolio risk. The system defines a risk range for every profile. Think about you are conservative and your portfolio risk is high: something goes wrong and you receive a low score.
  • Performance: as before in risks, T-Advisor establishes a range for the investment profile expected return. If the portfolio return is in it, it marks. If the return is nearest to the highest point in the range, your mark will be also higher.

T-Advisor suggests the investor possible improvements in every measure. For instance, as we see in the picture above, it recommends a review of the bearish positions. How can the T-Advisor user find new investment ideas? Searching in our “Market opportunities” tool or looking at in every position report (our T-Report) some alternatives that the own system suggests.

Create your own portfolio and discover these tool functions!