YPAFI

YPAFI

Quantitative Portfolios for Active Investors

Methodology Books Growth Portfolio Market Neutral
 

Methodology 


The stock market is a minefield. If you don't have a plan, follow someone who has one. 

Some strategies have been profitable through all market conditions for more than 16 years. Choose those corresponding to your goals and risk tolerance. Execute them ignoring the news and the charts. Follow a plan consistently with discipline and without emotions. Connect to your trading account five minutes a week and free your mind the rest of the time.
We have various portfolios corresponding to various goals. They are for informational purposes. We are not a Registered Investment Advisor and this is not investment advice.

YPAFI Market Neutral (weekly): Investing in stocks without fearing the next crash.

- YPAFI Growth (weekly): Seeking superior risk-adjusted returns. 

- Books.



Robust Strategy Design

We elaborate strategies starting from fundamental and technical analysis research. We do our best to detect and avoid curve-fitting. The period of simulation is as long as possible depending on data availability, most of the time since January 1999. This period covers all conditions and two market cycles.

method

The Luck Factor

Luck does exist. With the same probability to win (p) and the same average win/average loss ratio (w/l), your account may experience very different possible futures depending on the sequence of gains and losses. Example with w/l=1,4 and p=50%:

Ypa Finance

We select only strategies with a focused beam of possible paths, like this one:

Ypa Finance

To evaluate robustness, we use a probabilistic indicator taking into account the data sample size. Every model is an approximate representation of a real phenomenon. It is impossible to reduce the risk to zero or to predict the future, but it is possible to detect when a strategy goes out of its normal limits.

Psychological Risk

Even a good strategy may have a 30% drawdown and stay negative during months. It is easy to imagine, but harder to live. It is better to invest less capital than giving up under pressure with a good strategy. Without a long term vision, the short term makes no sense.


* CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.



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"You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right. "
Ben Graham