Why “Fiduciary” Is More Than Just a Word In investing, words are cheap. Everyone says they have your “best interest” at heart. Everyone claims they’re a “trusted partner.” But only one word – “fiduciary” – carries the full legal and ethical weight of a promise. Even though we’ve probably heard the word fiduciary before, there is likely no other word that is more misunderstood by the investing public. I was talking with another financial professional in preparing this article, one with over 25 years of experience with a major investment firm, and he had difficulty defining the details of when a fiduciary responsibility is required. Please be sure to read the “Common Misconceptions” below. A fiduciary is a financial professional bound by fiduciary duty: a duty of loyalty, a duty of care, and a duty to act in good faith. That means putting your needs ahead of their own, avoiding self-dealing, and steering clear of potential conflicts of interest. This is important because the fiduciary standard is backed by law—the Investment Advisers Act, the Securities and Exchange Commission (SEC), and the Department of Labor (DOL) all define and enforce fiduciary responsibilities. Registered Investment Advisors (RIAs), fiduciary advisors, and Certified Financial Planners (CFPs) who accept fiduciary status commit to aligning their decisions with their clients’ best interests. This article breaks down what a fiduciary investment process looks like. You’ll see how it differs sharply from two common alternatives: Research platforms and services for DIY investors, where you’re the chief investment officer, financial planner, and risk manager of your own life. Broker-based advice, where advisors from the traditional wire houses and brokerage firms may operate under the lower suitability standard, meaning they only need to recommend something “suitable,” even if it’s not in their clients’ best interests. By the end, you’ll see how a fiduciary approach can better align your portfolio with your goals, protect your beneficiaries, and reduce both financial and behavioral costs along the way. Step One: Establishing Goals and Priorities A fiduciary begins not with a solution, even if you state a specific product at first. They will lead with questions such as: What do you want your money to do for you and your family? What financial goals matter most: retirement income, helping children, charitable giving, leaving a legacy, etc.? What’s your tolerance for risk, both financially and emotionally? This should lead to many follow-up questions, but this deep discovery process is not about selling investment products. It’s about aligning your financial situation, time horizon, and values with an investment strategy. Contrast this with other approaches: Broker-dealers may lead with investment options tied to their financial institutions’ offerings, such as proprietary ETFs, mutual funds, or structured products. Their focus can tilt toward products that generate commissions, creating potential conflicts of interest. These products will generally be offered in an unmanaged brokerage account, as opposed to separately managed accounts. Services such as newsletters, timing services, and possible auto traders that serve DIY investors may offer buy and sell signals, macro viewpoints, other investment tips, etc. They generally do not fall under the fiduciary requirement. The reputable services should have a prominent disclosure, but many do not. The rules of thumb or tips they provide are not necessarily connected to your long-term financial goals. Without clear alignment between goals and strategy, the process of investment management becomes reactive instead of intentional. A fiduciary makes sure the foundation is strong before moving forward. Step Two: Comprehensive Financial Analysis and Risk Assessment Fiduciary responsibilities will extend beyond asking what you want and dig into what you have. This may include: Income, expenses, and liabilities. Existing investment portfolio. Retirement plan balances and distributions. Tax situation. Insurance coverage. Fiduciary advisors will use analytical tools, coupled with a deep understanding of your risk capabilities, to help you make informed decisions. These tools may measure how your investment portfolio may behave across thousands of scenarios, not just in the best-case or worst-case scenarios. By contrast: Services for DIY investors often lean on simplistic heuristics (“own your age in bonds”) or act on your fear and greed. Broker-dealers may use surface-level profiling forms, which can logically justify a specific investment product. The fiduciary standard of care requires more. It requires understanding your total financial situation before making investment decisions. Step Three: Crafting a Diversified Portfolio Fiduciary advisors construct investment portfolios using evidence, not hunches. That means they lean on: Broad diversification across asset classes, sectors, and geographies. Low-cost, tax-efficient investment products. May utilize academic research, not company-sponsored studies, to support and clarify their actions. The goal isn’t to chase fads but to design a durable portfolio that grows wealth while managing risk. Contrast: Broker-dealers may favor higher cost or proprietary products that generate fees for financial institutions. Some firms can create products that have the same cost as other solutions, but their advisors’ pay grid is affected greater by one product over another. They are not required to tell you every detail of their compensation pay grid. DIY services may overconcentrate in hot stocks, neglect asset allocation, or let your emotions drive investment decisions. A fiduciary advisor avoids self-dealing, mitigates conflicts of interest, and sticks to clients’ best interests. Step Four: Tax-Aware Portfolio Construction Taxes can silently erode returns over time. A fiduciary process may explicitly account for tax impact, seeking to minimize “tax drag.” This includes: Strategic asset placement. Tax-loss harvesting – when consistent with your overriding objectives. Roth conversions. Charitable gifting strategies. Broker-dealers may not integrate this depth of tax analysis. DIY investors often overlook it entirely. Fiduciary advisors see tax strategy as part of wealth management, not an afterthought. Step Five: Ongoing Monitoring and Rebalancing A fiduciary doesn’t disappear after the portfolio is built. Ongoing monitoring is part of fiduciary responsibilities. That means: Measuring performance against appropriate benchmarks. Periodic rebalancing to keep asset allocation in line with the overall plan. Making evidence-based adjustments instead of emotional ones. In some instances, Brokers may trigger unnecessary transactions that generate commissions. DIY investors often panic in

Most people assume that smart people naturally make smart money moves. After all, if you’re educated, successful, and informed about the stock market, shouldn’t you also be good at making investment decisions? The uncomfortable truth is that intelligence alone doesn’t protect you from making dumb decisions with your money. If anything, smart investors can be even more vulnerable. Why? Because knowledge often brings overconfidence. Experience can fuel stubbornness. And when combined with the natural cognitive biases all humans share, the result is that some of the brightest minds in finance fall into the same traps as everyone else. This matters because financial outcomes aren’t driven just by spreadsheets and forecasts. They’re shaped by psychology, behavior, and decision-making under pressure. Understanding why smart money can still stumble, and learning practical ways to keep your wealth on track, can make the difference between compounding steadily over decades and watching your hard-earned savings evaporate. The Psychology Behind Poor Investment Decisions Even smart investors aren’t immune to the quirks of human psychology. If anything, their confidence in their abilities can amplify these biases: Overconfidence – Smart people often overestimate how much they know. They believe their insights give them an edge, leading to risky trades, concentrated bets, or chasing hype. As Charlie Munger once quipped, it’s not a lack of intelligence that hurts investors, it’s the certainty that they’re right. Loss aversion – Behavioral finance research shows we feel the pain of losses about twice as strongly as the joy of gains. That means even smart investors can panic during a downturn, selling at precisely the wrong moment. Confirmation bias – Instead of looking for balanced evidence, we all tend to seek information that confirms what we already believe. If you’re bullish on crypto, every bullish article looks like validation; if you expect a crash, every gloomy forecast feels like proof. Short-term thinking – Recency bias tricks us into giving today’s news too much weight in long-term plans. A bad quarter in the stock market can scare even seasoned investors into abandoning an otherwise sound investment strategy. These psychological blind spots don’t vanish with intelligence. In fact, they often grow stronger the more someone believes they’re immune to them. Common Dumb Decisions Even Experienced Investors Make When you put these biases into real-world investments, they often lead to a predictable set of mistakes. Even the most experienced investors aren’t spared: Chasing past performance – Buying mutual funds or ETFs that just had a great 1-3 year run, assuming the streak will continue. As every disclaimer says, past performance is no guarantee of future results. Panic selling in downturns – Letting fear take over when volatility spikes. Warren Buffett has long reminded investors to be “fearful when others are greedy and greedy when others are fearful,” but in practice, most do the opposite. Failing to diversify – Concentrating too much in one stock, one sector, or one asset class. Diversification may feel boring, but it’s one of the only free lunches in personal finance. The problem is, by the time the market lets you know you are not diversified, it’s too late. Ignoring fees and taxes – High expense ratios, frequent trading costs, and tax-inefficient moves eat away at returns far more than many investors realize. Holding losers too long – Refusing to sell because admitting a mistake feels worse than the financial hit itself. Stop loss rules exist for a reason, but discipline is hard when emotions are involved. The Role of Market Hype and Herd Mentality Markets aren’t just about numbers; they’re about stories. And stories spread fast. Think about the waves of enthusiasm around crypto, meme stocks, or hot tech IPOs. Social media, podcasts, and LinkedIn posts amplify excitement. Pretty soon, even smart investors feel that familiar twinge of FOMO: fear of missing out. Herd mentality is powerful. If everyone around you is doubling their money in something new, sitting on the sidelines feels like losing, even if your own portfolio is performing just fine. This pressure nudges smart investors into dumb decisions, like buying into hype at inflated prices or abandoning carefully built retirement accounts to chase a quick win. History is full of these moments, from the dot-com bubble to the housing frenzy to the more recent crypto and meme craze. Each time, smart investors justified their choices with real-world logic. Each time, many end up learning the hard way that markets can humble anyone. Why Intelligence Doesn’t Always Equal Better Investing Here’s the paradox: the smarter you are, the more likely you are to rationalize your mistakes. Financial IQ vs. emotional discipline – Knowing how to model discounted cash flows or analyze balance sheets doesn’t mean you’ll stay calm when your portfolio drops 25%. A frequent comment we also hear from DIY investors is “I know it can drop 30%, but I plan on getting out long before that”. Complexity as a trap – Smart investors often gravitate toward sophisticated strategies, but complexity can backfire when markets move against them. Sometimes simple solutions, such as index funds and steady asset allocation, outperform elaborate approaches. The illusion of control – Smart people often believe they can outthink randomness. But the stock market is full of surprises, downturns, and volatility that no model or forecast can fully predict. The real key isn’t brilliance; it’s temperament. The ability to sit still or move decisively when appropriate, avoid FOMO, and stay consistent when everyone else is panicking matters more than raw IQ. Strategies to Avoid These Mistakes The good news? You don’t have to accept dumb decisions as inevitable. There are practical ways to design systems that protect you from your own worst instincts: Automate where possible – Automatic contributions to retirement accounts, dollar-cost averaging, and portfolio rebalancing help remove emotions from the equation. Write down your rules – A must-do, especially as a guardrail when emotions run high. Having pre-committed rules about diversification, stop loss levels, and rebalancing schedules helps you stay disciplined. Diversification as default – Instead of trying to

Do-it-yourself investing became popular many years before the Meme stock craze.  With apps, zero-commission brokers, and endless online resources, the barrier to entry has all but disappeared. Anyone with a smartphone can buy stocks, crypto, and maybe even alternative investments (alts) in seconds. The appeal is obvious: lower fees, full control, and the sense of empowerment that comes with managing your own money. Many DIY investors see it as a way to avoid Wall Street sales pitches and keep more of their returns. This might sound somewhat unusual coming from Porter Investments, a Strategic investment management and portfolio risk management firm, but we’ll be the first to say that many people can be successful investors on their own. With discipline, patience, and a simple plan, investors can build some wealth without ever hiring professional help. In fact, most people have already heard the commonly advised strategies to help do that: save consistently, diversify broadly, and stay invested through market ups and downs. But success doesn’t mean it’s always easy. The stock market is a humbling teacher. Complexity can grow as savings accumulate, tax rules shift, and emotions and financial goals evolve. Even investors who start out confident can find themselves second-guessing portfolio decisions, wondering if they’re taking too much risk, or overlooking opportunities. That’s where the harder question emerges: When do DIY investors need help? At what point does independence cross into overwhelm? And how can investors know when bringing in a financial planner or advisor is not a sign of failure, but simply a smarter way to protect wealth and align with long-term goals? The right answers will vary among individuals. This guide will try and unpack those questions, so that you can get closer to deciding what is best for you. We’ll explore the benefits and pitfalls of DIY investing, the mistakes to avoid, and the complex situations where professional guidance adds value. In the end, you want to strike the right balance between independence and expert advice. Do-it-Yourself DIY Investing: The Appeal and the Risks At its core, a DIY investor is someone who chooses to handle portfolio management, research, trades, and financial planning on their own. That means building an investment strategy, making portfolio decisions, and dealing with the ups and downs of the stock market without outside help. For many, the appeal of DIY investing is irresistible: Accessibility: Online platforms and apps like Fidelity, Schwab, and Robinhood make it easy to open investment accounts and trade in minutes. Cost savings: By avoiding financial advisors, many DIY investors hope to save on fees. Control: Investors make their own decisions about stocks, bonds, mutual funds, and other asset classes. Independence: There’s no worry about any hidden agendas that a financial representative may have with their employer. And for beginners, the DIY approach can work, especially when investing is simple. Buy a broad market index fund, set up automatic savings, and let compounding do the heavy lifting. Warren Buffett himself has said that most people would be better off buying low-cost index funds than trying to pick individual stocks. But what feels straightforward in the beginning can grow complicated fast. As wealth grows, complexity multiplies. Tax issues arise, portfolios need rebalancing, and the stock market doesn’t always cooperate with your risk tolerance or operate on your time frame. Suddenly, the simplicity of “I’ll do it myself” may begin to feel more like “I’m in over my head.” The Potential Benefits of DIY Investing DIY investing has real advantages, especially for those who are detailed, disciplined, self-aware, and have their biases in check. One of the biggest benefits is cost savings. By avoiding advisor fees and managing their own investment accounts, investors keep more of their returns. In a world where every percentage point compounds over decades, lower expenses can make a meaningful difference in long-term wealth. Another benefit is control. DIY investors make every decision, from asset selection to when and how to exit positions. You don’t have to rely on someone else’s timeline. That level of control can feel empowering and keep investors close to their money. For people who are honest with themselves about their limitations and biases, DIY investing also builds financial literacy. Researching potential investments, learning about things such as correlations, proportional performance, martin ratios and standard deviations, as well as confronting your emotions during volatile markets all create valuable lessons. In short, if an investor is detail-oriented, willing to learn, and disciplined enough to acknowledge their blind spots, the DIY approach can absolutely work. Many have built strong portfolios and met their financial goals without ever hiring a financial advisor. When Do DIY Investors Need Help? Here are the clearest signals that it may be time for DIY investors to seek professional guidance: Feeling Overwhelmed by investment choicesThe marketplace is flooded with investing options: mutual funds, ETFs, stocks and bonds, real estate, even alternative assets. Many DIY investors freeze under the weight of too many choices, unsure which strategy matches their goals and risk tolerance. Paralysis by analysis. Difficulty aligning investments with long-term goalsOwning a portfolio is one thing; aligning it with financial goals like retirement, education, or building a nest egg is another. Without a clear investment plan, many investors chase performance rather than building a durable strategy. Sometimes we think we are tracking ourselves to a plan when we are not. Struggle with tax implications and their continual changeCapital gains, Roth IRA conversions, retirement withdrawals, and tax-loss harvesting all require more than a surface-level understanding of finance. Small mistakes here can cost thousands of dollars. The recent “One Big Beautiful Bill, or (OBBB)” introduced new tax related considerations for your investments.   Emotional investing leads to poor timing decisionsBuying at peaks, selling in market downturns, or letting greed drive portfolio decisions is one of the most common mistakes DIY investors make. Volatile markets test everyone’s nerves, and emotions can undo years of disciplined saving. Life events that add complexityAn inheritance, marriage or divorce, selling a business, or nearing retirement are times

A Beginners Guide for DIY Investors The gap between Wall Street and Main Street started shrinking in the early 2000’s but has accelerated since Covid. What used to be the exclusive playground of hedge funds and institutional giants — blazing fast computers, complex trading systems, and algorithms, is now accessible to everyday investors with a decent internet connection, curiosity, and discipline. This shift is not only about access to new tools, but t’s also about a new way of thinking.  It is about replacing gut feelings with rules, replacing panic with process, and replacing “hunches” with historical data. Welcome to the world of algorithmic trading. For the DIY investor, algorithmic trading can seem intimidating: lines of code, statistics, probabilities, and AI bots. But the truth is, algorithmic trading is just a fancy term for something quite simple; it’s using predefined rules and data to decide when to buy or sell. This guide is for the self-directed investor who wants to start and understand what algorithmic trading really is, how it works, what tools are out there, the strategies that can be used, and whether it’s worth your time and money. Like all good things in investing, it’s not a magic bullet. But with the right mindset and risk management, it can be a valuable tool in your investing toolkit. What is Algorithmic Trading? Algorithmic trading is sometimes called algo trading or automated trading because of its use of computer programs to follow a set of instructions to place trades. These instructions can be as simple as “Buy when the price moves above the 200-day moving average” or as complex as multi-variable machine learning models reacting to real time market conditions. At its core, algorithmic trading replaces the manual trade, the time when you click “buy” or “sell” with a set of pre-programmed rules that do it for you. Think of it as an autonomous vehicle, but for your portfolio, as you navigate down your investing journey.    There are generally two types of algorithmic systems: Rules-based systems: These follow logical steps based on market data. If condition A occurs, then do action B. For example, if the stock moves above its 50-day moving average and volume spikes, buy. This is a very simple example. But as conditional loops become nested and multi variable, they all followed pre-defined steps. AI-driven systems: These use adaptive models and are often powered by machines, learning to find patterns in vast sets of financial data. They don’t just follow rules; they learn and adjust over time. Development in this area has been exploding since 2024 and is rapidly changing Common inputs used in algorithms include: Price trends Trading volume Volatility levels Timing of trades News sentiment Technical indicators like MACD or RSI Whether you’re working with a simple spreadsheet-based system or a sophisticated neural net, the goal remains the same: to make decisions based on data, not emotion. How Does Algorithmic Trading Work? You can think of algorithmic trading like a factory assembly line. It works in stages as each important step builds upon the prior steps to the final product and goal of a well-executed trade. Here’s a breakdown: 1. Market Data Ingestion The process begins by pulling in lots of data.  This includes both historical data (used for backtesting and model building) and real time market feeds that drive actual trade decisions. Market data includes prices, volumes, volatility, order book depth, and even news headlines or social sentiment. Some algorithms work off minute-by-minute data; others look at daily or weekly signals. The quality, speed, and reliability of this data stream can make or break your strategy. 2. Signal Generation This is the logic layer, where the sausage is made. It’s where your algorithmic trading strategies interpret the data and generate a buy or sell signal. This can be as simple as a moving average crossover, or as complex as a machine learning model evaluating dozens of variables. For example, a momentum strategy might buy a stock when its price rises faster than a specific threshold over a rolling period (say, 15% over 44 days)  and volume exceeds average. 3. Trade Execution Once a trade signal is triggered, the algorithm passes the output to the execution engine. Here, speed and precision matter. The trade is routed through a broker or trading platform, typically via an API, and placed on the exchange. Some systems will use smart order routing to get the best price across multiple venues, while others may break up large trades into smaller chunks to minimize market impact. In high-frequency or intraday trading, fractions of a second in execution time can affect returns. 4. Backtesting and Refinement This is your test lab. Before running a strategy with real money, you’ll test it against years of historical data to see how it would’ve performed under various market conditions. As much as we would like to be true, we must never forget that just because a system performed well in the past doesn’t mean it will work in the future. That’s why good backtesting includes out-of-sample testing, stress scenarios (like 2008 or 2020), periods of slow rising and falling markets and fast rising and falling markets, as well as reasonable assumptions about trade slippage and transaction costs. 5. Ongoing Monitoring and Adjustments Algorithmic trading isn’t “set it and forget it.” Even fully automated systems require monitoring. APIs break. Data feeds stall. Market regimes change. The most successful DIY traders treat their systems like living, breathing tools while refining them over time, adjusting for new conditions, and learning from mistakes. Even the best algorithm is only as good as its ability to adapt. You must want to commit the time to not only developing a system but continually commit to the ongoing maintenance. Popular Algorithmic Trading Strategies for DIY Investors While hedge funds may run hyper-optimized black box systems, most DIY investors benefit from keeping it simple. Here are several algorithmic trading strategies that are both approachable and powerful: 1. Momentum Trading This strategy assumes

Introduction: Why “Papa Bear”? When Brian Livingston unveiled the Papa Bear Portfolio in 2018, his goal was to provide everyday investors a playbook that could allow their accounts to grow in a bull market, yet hunker down like a grizzly when storms roll in. He wasn’t trying to invent another flashy trading system or beat the S&P 500 in every single year. Instead, he set out to help with a more practical problem. How can real people stay invested for the long term without letting volatility hijack their emotions? Porter Investments is passionate about constantly looking for ways that can help the individual investor do that. Livingston saw that most portfolios live at one of two extremes. On one side are pedal-to-the-metal stock allocations that soar in good times but leave investors wide-eyed and sleepless in panics. On the other hand, there are ultra-defensive mixes that preserve capital yet barely outpace inflation. Papa Bear tries to split that difference. By ranking a diverse menu of asset-class ETFs each month and owning only the three with the strongest momentum, the strategy seeks to ride what’s working and sidestep what isn’t. There is no crystal ball, just cold market data and a pre-set rulebook. This guide was written to unpack the “why” as much as the “how.” By reading this you should be able to understand the strategy’s aims, rebuild it for yourself, judge whether it suits your own temperament and tax situation, and perhaps most important, start to see why a little simplicity and regular routine can be the secret ingredient to long-term investing success. What Is the Papa Bear Portfolio? At heart, Papa Bear is a momentum-based investment strategy designed to deliver balanced growth while limiting deep losses. From a menu of 13 broad ETFs, the portfolio owns only the three with the best recent performance. Positions are equal-weighted and checked monthly. The premise of the strategy can be quickly summarized as follows: Follow what’s working. Own assets that are already rising, whether they’re U.S. stocks, gold, or short-term Treasuries. Cut what’s not. If an ETF falls out of the top three momentum slot, sell it and buy the next one up the leaderboard. Stay diversified. The menu spans equities, fixed income, commodities, and REITs so the winners probably would not come from the same category twice in a row. It is important to understand that many momentum strategies do not achieve their longer-term outperformance from the outsize gains during bull markets, but instead, they achieve it from losing less during severe bear markets than a more passive buy and hold approach. Papa Bear adheres to that approach, but its strong point is that it is a systematic, low maintenance investment approach. The Philosophy Behind the Papa Bear Portfolio Most portfolios are built for either offense (maximum growth) or defense (capital preservation). Papa Bear tries to split the difference. The logical argument behind the strategy is this: You only get higher long-term returns if you stay in the game Momentum is the engine. It is an evidence-based, quantitative finance principle showing that winners tend to keep winning for a while. Diversification and cash-like assets are the seat belts. Together, they create a smoother ride that investors are less likely to abandon in panic, reducing the impact of emotional biases like loss aversion or recency error. The Papa Bear Portfolio differs from another strategy we have discussed before: the Mama Bear Portfolio. While both use the same momentum-based selection process from a diversified ETF menu, Papa Bear holds the top three performers each month, whereas Mama Bear holds the top five. This makes Papa Bear more concentrated and potentially higher returning, but also slightly more volatile. Mama Bear is designed for a smoother ride with broader diversification, appealing to more conservative investors. Core Components of the Papa Bear Portfolio Asset Symbol Why it’s included  U.S. Total Stock Market VTI Broad mkt. exposure for uptrends International Stocks VXUS Diversifies for geographic risk Small Cap Stocks  IWM Captures size premium Long Term Treasuries TLT Defensive positioning vs. StocksShort Term Treasuries SHY Cash Proxy IG Corporate Bonds LQD Income plus Relative SafetyGoldGLDInflation hedgeReal Estate VNQSome Income, hard asset alt.CommoditiesDBCHard assets exposureEmerging MarketsVMOInternational diversification/growth In addition, you could include specific, focused ETFs within an asset class such as:  High Yield Bonds  JNK Income with equity behavior Income with equity behavior VEA Established FTSE opportunities Once you have exposure within an asset class, appropriate momentum should be your guide. The abundance of ETF’s provides you with ample opportunities for analysis. How the Papa Bear Portfolio Works Generally, you follow the following steps: Step 1: Gather market data. At the month-end, calculate each ETF’s total return over the past 136 trading days (~6 months). Step 2: Rank them. Sort the 13 returns from highest to lowest. Step 3: Buy the top three. Allocate one-third of your capital to each. Step 4: Repeat next month. If today’s top three differs from last month’s, trade accordingly That’s it. No inflation forecasts, no prediction about where to not invest today, etc. You do what the financial data tells you. Why 136 Days? The original research found that roughly six months balances responsiveness with noise reduction. Too short and you chase whipsaws; too long and you react late to regime shifts. Because the rule is hard-coded, you remove the temptation to fiddle, which is an important edge over most DIY “seat-of-the-pants” investment strategies. Advantages of the Papa Bear Portfolio Potential for Small Drawdowns. In many historical bear markets Papa Bear lost about half as much as the S&P 500. Smaller holes require smaller shovels. Set-and-Forget Rhythm. Checking monthly is better than doom-scrolling daily, which is a tough habit to break, but necessary. Tax-Friendly for IRAs. The strategy’s modest turnover works best in tax-sheltered accounts where gains aren’t immediately taxable. If you lower your turnover, you will be exposed to higher drawdowns. Rules over Emotions. Systematic trading mitigates emotional biases that cause investors to buy high and sell low. Built-In Adaptability.

There’s a temptation in investing to believe that if something worked in the past, it will work again. That logic fuels many decisions, good and bad. But the real challenge lies in knowing why something worked, when it worked, and if it could work again. This is where portfolio backtesting steps in. Backtesting is like running your investment strategy through a time machine. You take a strategy using historical data and ask, “If I had done this before, how would it have turned out?” It’s a simulation that attempts to answer one of the most important questions an investor can ask: Does this idea or strategy actually work? I. What Is Portfolio Backtesting? At its core, portfolio backtesting is the process of applying an investment strategy to historical data to estimate how it might have performed in the past. While it doesn’t predict the future, it can help you better understand the strengths and weaknesses of a strategy. Think of it like test driving a new car before negotiating a price to buy it. You’re not trying to predict every traffic light, but you want to get a better idea of how it navigates through traffic.  Done right, backtesting is a tool for insight. Done wrong, it creates wrongly placed confidence and expectations that are disconnected from reality. Why Backtesting Matters Backtesting has become one of the foundational tools in investing. When done correctly, it helps both novice and professional investors build conviction and clarity around their strategies. It can reveal whether your approach works only in certain market conditions or holds up over long-term cycles. Without backtesting, you’re flying blind—making investment decisions based on hunches or intuition rather than evidence. But like any powerful tool, its misuse can be misleading. Too often, backtesting results are treated like sales brochures: polished, selectively edited, and overly optimistic. To benefit from the full value of backtesting, you need to understand both its utility and its limits. Reduces guesswork. Instead of relying on gut feelings, you use data to inform your investment decisions. Reveals weaknesses. Backtesting can show how a strategy behaves in bear markets or periods of volatility. Enhances discipline. If you know how a strategy has reacted over time, you’re more likely to stick with it during the tough periods. II. Key Elements of Portfolio Backtesting Backtesting isn’t just about plugging in numbers and hoping for the best. Each element of the process must be carefully considered, from the data you use to the metrics you track. A good backtest tells a story: how the strategy behaved, when it struggled, and what that might mean going forward. It is the collection of many calculations, when studied critically as a group, that starts to paint a picture of possible investment outcomes.  It starts with data – accurate, comprehensive, and properly adjusted. From there, you analyze many elements of portfolio performance using the right metrics and ensure you’re testing across diverse market conditions. In this section, we break down just a few of the key components that every reliable backtest must include. 1. Historical Data Price history: Past asset prices, adjusted for splits and dividends. Trading volumes: Helps verify liquidity and buyer/seller convictions. Economic indicators: Critical for macro-sensitive strategies. Challenges: Incomplete or incorrect data can distort backtesting results. It is imperative that you have a meaningful sample size, one that is statistically sufficient.  Survivorship bias can sneak in if components of the investment strategy are no longer being traded. 2. Metrics and Performance Indicators Backtesting results are only as useful as the metrics you use to analyze them. Simply seeing that a strategy made money over a certain time period isn’t enough. You need to understand how it made money, how much risk it took on, and whether that risk was justified. This is where performance indicators and metrics come into play. They allow you to compare strategies apples-to-apples, assess volatility, and gauge the potential pain points an investor might face. Whether you’re building a new portfolio or evaluating an existing one, these tools provide a language to describe both success and failure with clarity. At a minimum, some of the metrics and performance indicators you should analyze include: Compound Annual Growth Rate (CAGR): Smooths out yearly returns into a single, comparable figure. Maximum Drawdown (Daily): Tells you how far the portfolio fell from peak to trough. Don’t get lazy and look only at monthly drawdowns. This is what many in the industry use in sales literature, but it hides the amount an investment fell in the past. We have had many snapbacks in prices since 2020 that started during the month, causing a monthly number to understate the actual drop.   Standard Deviation of Monthly returns (Annualized): Provides an indication of historical volatility, but because of its non-directional calculations, tends to be more suited as a longer-term measure.  Rolling returns and tracking to benchmark: Shows continual rolling 12-month look back at returns instead of looking at just annual returns. Periods of extreme volatility and Bear markets don’t always fit neatly into Jan-Dec calendar. You should also track how a prior investment performed on a rolling basis, relative to an appropriate benchmark. Every model will have shorter periods when it underperformed its benchmark, but this will provide a better indication of what it has done over a more meaningful time frame. Sharpe Ratio: Provides an indication of risk-adjusted returns. Attempts to measure return per unit of risk. It is somewhat useful but has the same limitations as the standard deviation.  Maximum Flat Days: Provides indication of an investments ability to recover from the drawdown. Beta: Provides an indication of how much an investment may move, in either direction, in relation to an appropriate benchmark. Ulcer Index: Provides an indication of a normal and more frequent pullback in price you may receive with an investment. Ulcer Performance Index (Martin Ratio): Concentrates on the downward drops in price in relation to the return. Attempts to measure “bang for the buck”.  Distribution Outcome simulation: You should

Introduction: Why Quantitative Investing Matters Imagine trying to make investment decisions in a room full of TVs showing CNBC, CNN, Fox News, and Bloomberg. Everyone has an opinion, emotions run high, and headlines constantly pull your attention. Quantitative investing is an attempt to turn down the volume. It’s an approach rooted in logic, rules, and data rather than gut feeling or hot takes. Quantitative investing (or “quant investing”) uses data analysis, mathematical modeling, and statistical tools to guide investment choices. What started in very secretive firms like Renaissance Technologies in the 1980s and 90s has been sweeping into more mainstream firms and portfolios for many years now. There are many different variations and applications today, from Robo-advisors to ETFs driven by rules-based criteria, as quantitative strategies have gone from niche to necessary. This data-driven framework is appealing for long-term investors who want to overcome emotional biases and stay consistent. However, it also comes with its own risks and learning curve. It’s not just about numbers and formulas—it’s about consistency. In a world where headlines can make markets swing wildly, quant investing is a quiet, deliberate process that aims to stick to the plan regardless of market noise. That can be an enormous advantage for those who want their portfolio to reflect discipline, not drama. And as more financial tools become digitized and accessible, individual investors have more opportunity than ever to apply quant principles in their own decision-making. What Are Quantitative Investment Strategies? Quantitative investing strategies rely on financial data, market data, and economic indicators to uncover patterns and make investment decisions. In contrast to discretionary investing, where humans analyze and interpret the market manually, quant strategies depend on algorithms and models to do the heavy lifting. A typical quant strategy might look at things like a stock’s price momentum, earnings reports, or even social media sentiment. By using a blend of data analytics and predefined rules, the strategy decides when to buy or sell. This process removes the guesswork and personal bias that often creeps into traditional investing. This approach works best when it is applied with rigor and consistency. Quant investing starts with a hypothesis about what drives returns, such as undervaluation, earnings surprises, or investor overreactions, and then it tests that theory with large amounts of data. If the data supports the hypothesis, it may become the foundation for a rule-based model. The goal is to make decisions based on what has worked historically, statistically, and with logic, not on a gut feeling or media hype. A few more common inputs for quant strategies include: Stock prices, volume, and volatility Company fundamentals like earnings and debt Economic indicators such as GDP or interest rates Alternative data, like web traffic or satellite imagery How Quantitative Models Are Built Good models start with a simple question: Can a repeatable pattern or anomaly in the market be captured and profited from? That question attempts to be answered with lots of data.  Quantitative models begin with historical market data, which is analyzed to find patterns. These patterns are then converted into mathematical rules. Before any real money is invested, these rules are back-tested on past data to see how they would have performed. But there’s a catch: past performance is not always a predictor of future results. That’s why a great model also undergoes out-of-sample testing and validation, which is tested on data it hasn’t seen before. Common tools include Python, R, MATLAB, and Excel. They are then paired with solid statistical reasoning and strong risk management. Even with rigorous testing, quant strategies must be stress-tested across different market conditions. It’s not enough to succeed during bull markets; a resilient model needs to handle volatility, downturns, and shifting correlations.  Overfitting – which can cause a model to work great on historical data, but fail in real-time, is one of the greatest dangers. Unfortunately, it is also one of the most common occurrences we see. That’s why simplicity, transparency, and ongoing refinement are valued in good models. The goal is never perfection, but robustness. Common Types of Quantitative Investment Strategies Quantitative strategies come in many flavors. Each type looks for different patterns in market behavior and relies on its own set of assumptions. A few of the variations used today include: Factor-Based Investing: This strategy selects stocks based on factors like value, momentum, size, or quality. It looks for common traits linked to outperformance. Statistical Arbitrage: Often called “stat arb,” this method identifies pricing anomalies between similar securities. Think what it would be like to buy Nvidia and short Samsung if their usual price spread diverges. Trend Following: This approach rides market momentum. Generally, its approach is that if prices are rising, buy. If they are falling, sell. The goal is to let winners run and cut losers short. High-Frequency Trading (HFT): Operating at microsecond speeds, HFT strategies capitalize on tiny price differences across exchanges. This requires deep tech infrastructure and high capital requirements. Machine Learning Models: More advanced systems use algorithms that are learned from data. They can uncover complex relationships but often lack interpretability. Each of these strategies has its unique appeal and challenges. Factor investing has grown popular due to its transparency and ease of replication. “Stat arb”, while potentially lucrative, can suffer when correlations break down. Trend following shines in strong market moves but can struggle in choppy or sideways markets. High-frequency trading demands infrastructure and access that’s usually limited to institutions, while machine learning strategies offer adaptability but can become black boxes – trading based on patterns even humans may not fully understand. Choosing the right quant strategy depends on your time horizon, your understanding of the strategy, your tolerance for volatility, and your ability to manage transaction costs. Where Quant Strategies Are Used Quantitative investing isn’t limited to Wall Street hedge funds. The tools and ideas have migrated into many corners of the investing world. Hedge Funds: Firms like Renaissance Technologies or Two Sigma use complex quant models to manage billions. Robo-Advisors: Retail platforms like

If you’ve studied price charts looking for clues, you know that markets don’t speak in words – they tend to speak in repetition and patterns. They are driven by Psychology. When the same price support level holds again and again, it may be the market is quietly insisting on something. And when it happens four times? That’s where the quadruple bottom pattern may be taking shape. The quadruple bottom is one of the rarest chart patterns in technical analysis. And its rarity is exactly what makes it worth understanding. Think of it like four failed jailbreaks: the sellers keep pounding on the same support level, but it holds firm. Each bounce builds confidence that maybe, just maybe, this is the floor. That may be a reversal pattern is unfolding. There’s also an emotional advantage in recognizing it. Traders who have been burned by false breakouts in the past may finally regain conviction when they see this pattern unfold consistently. This is not just a technical pattern; it’s a signpost of conviction, uncertainty, and change in behavior by buyers and sellers alike. That conviction doesn’t arise in isolation. It builds over time as the market refuses to break lower. Each touch reinforces a collective belief among participants that a new floor is in place. It becomes a self-fulfilling foundation where enough believers make it real. Why Understanding the Quadruple Bottom Pattern Matters: Recognizing the bottom pattern early can provide a strong risk/reward setup. It builds upon the principles of the double bottom and triple bottom patterns, but with more conviction. It signals a potential change in price action after prolonged consolidation. It helps investors regain confidence in uncertain market conditions. It acts as a visual story of market resilience and price defense. It builds confidence in long-term market support zones. It can signal institutional accumulation at the lows. I. Defining the Quadruple Bottom The quadruple bottom is a technical analysis chart pattern that occurs when a stock or asset tests a specific price support level or area four separate times without falling below it. This creates a flat base with multiple attempts to break that level, followed by a potential upward breakout. Unlike its cousins—the double bottom and triple bottom patterns—this formation suggests even stronger market resilience. The more times a level is tested and holds, the more significant it becomes. Buyers and sellers engage in a quiet tug-of-war, and the support line becomes the psychological battlefield. It’s not always clean. The lows might deviate slightly. Sometimes it looks like a sideways mess. But patterns don’t need perfection to work, they just need persistence. Importantly, the quadruple bottom does not function in a vacuum. It must be considered alongside broader technical and fundamental contexts. Is volume supporting the price floor? Are macroeconomic events influencing behavior? These questions deepen your understanding of the pattern’s potential. Like any chart pattern, confirmation and risk management are important. The more context you gather—volume analysis, trend strength, sentiment shifts- the more clarity you bring to your decision-making process. II. Understanding the Formation Process Most quadruple bottom formations begin after a market has been trending lower or trading sideways. The first touch usually follows a drop. What follows is hesitation. Attempts for a market rally fade. Sellers push down again—but this time, it doesn’t go further. And again. And again. In between these dips, the price rebounds slightly, creating a resistance level above the support zone. This price band or range, with repeated bottoms and muted tops, creates a coiled spring. Fewer sellers step in. More buyers accumulate. Price compresses. Tension builds. The final act? A price break to the upside that confirms the pattern. Each bounce off a support level is more than just a line on the chart. It is a decision by traders to hold firm or add to positions. Over time, these actions reflect a consensus that the price is undervalued. As the fourth touch holds, confidence swells, and sellers lose resolve. It’s this psychological escalation that makes the pattern so potent. The formation’s timing also matters. If it develops over weeks or months, the implications for a breakout can be far more significant. Time compression builds pressure—and with it, the strength of any move that follows. III. The Mentalities That Drive Quadruple Bottoms Price charts are just pictures of people’s decisions. And when you see a quadruple bottom, you’re seeing an indecision shift toward conviction. Each failed attempt to push below support creates cracks in seller confidence. On the other side of the trades, the buyers get braver; they see value. They know that others see value, too. The market begins to rotate from fear to curiosity to optimism. Buyers begin to act more quickly. Sellers get tired. And before long, the buyers and sellers who were locked in a stalemate begin to tip the scale. Market psychology is a key driver here. The longer prices are held at the support level, the more likely new institutional or retail investors begin to view it as a floor. That accumulation stage often becomes the seedbed for explosive price movements once resistance breaks. You aren’t just trading lines or trading levels, you’re trading behavior. This transition from skepticism to belief can be observed in market sentiment, news coverage, and even social media chatter. Once enough participants believe a bottom is forming, their actions drive the pattern to its final phase: the breakout. IV. Confirmation Methods: Volume & Technical Indicators A pattern is just a pattern until something confirms it. That’s where volume and indicators come in. Technical analysis gives us tools to help separate real breakouts from fake ones. Start with volume: if the price breaks the resistance level on a volume spike, it may mean more people are coming on board. At the very least, you may have more conviction with the existing holders. If indicators like RSI or MACD also diverge from price action during the lows, it signals weakening downside momentum. You can add other moving averages or Bollinger Bands

If you could build an investment portfolio designed to weather any storm – economic booms (2021), busts (2008, 2020), inflationary spikes (2022), and deflationary drops (2015), wouldn’t you want to know how it works? That’s the idea behind Ray Dalio’s All-Weather Portfolio. Born out of decades of extensive research and market observation and built on the principles of risk parity and economic cycles, this strategy aims to create a diversified portfolio that performs reliably across the four economic seasons that Dalio identifies: rising growth, falling growth, rising inflation, and falling inflation. It does not try to predict what’s next. Instead, it attempts to prepare for almost anything. I. Why the All-Weather Portfolio Matters Markets aren’t linear. We live through booms and busts, tech bubbles and housing crashes, deflationary recessions, and inflationary shocks. Social media can accelerate our fear and sentiments surrounding these events.  Traditionally balanced portfolios, like the classic 60/40 split between stocks and bonds, worked well at certain times, particularly during the disinflationary periods. But what happens when inflation rises or stays elevated? Or, when growth falters? Or both? This is where Ray Dalio’s approach makes a difference. Instead of basing an approach on historical averages or market forecasts, the All-Weather Portfolio was designed to survive and thrive in any economic environment. It acknowledges something that most investors overlook: the future is uncertain and surprises are inevitable. Major moves in the markets do not come from what people are expecting. They come from the unexpected, those events that were not on anyone’s radar. Economic shifts, policy changes, geopolitical tensions, these are things that can’t be continually forecasted with confidence. The 2025 Tariff tantrum is a great example.  The All-Weather Portfolio isn’t about trying to be right more often. It’s about being prepared even when you’re wrong. In this way, it gives investors a practical tool to reduce emotional decision-making and avoid panic-driven mistakes during a bear market. The strategy also offers peace of mind for those nearing retirement or managing generational wealth, where preservation is as important as growth. In uncertain times, confidence comes from knowing your portfolio isn’t betting on any one outcome.  It’s balanced for all of them. II. The Philosophy Behind the All-Weather Strategy Ray Dalio, founder of the hedge fund Bridgewater Associates, asked a deceptively simple question: What kind of portfolio would perform well across all environments? Rather than trying to outguess the market or the economy, Dalio focused on preparing for the full range of possibilities. His experience taught him that major market moves are often triggered by surprises—events that fall outside of investors’ expectations. These can’t be timed, but they can be prepared for. Dalio’s approach to economic analysis led him to identify the fundamental drivers of asset prices: changes in growth and inflation. By structuring a portfolio that is indifferent to any one economic scenario, investors are no longer beholden to the swings of a single market or asset class. This is a strategy rooted in humility and acknowledging that even the best forecasters are frequently wrong.  Many people may start managing some of their investments with little humility, but reality always finds a way to provide you with more.  This approach helps to make that process less painful. The result is a framework that distributes risk evenly across the different economic seasons, ensuring that no single event can dominate the outcome. This isn’t just about diversification, it is about intelligent, scenario-based diversification. Dalio and his team broke the economy down into four possible “seasons” or economic environments: Rising growth (economic expansion) Falling growth (recession) Rising inflation (1970s-style inflation shocks, mid-2020’s?) Falling inflation (deflationary slowdowns) By spreading investments across assets that do well in each of these, and balancing risks, you create a portfolio built for any weather. III. Understanding Risk Parity Most investors are familiar with the idea of diversifying a portfolio by mixing different asset classes. But diversification by asset type isn’t enough. The All-Weather Portfolio uses a more advanced idea called risk-parity, which focuses not on how much money is invested in each asset, but on how much risk each one contributes to the portfolio. In a traditional 60/40 portfolio, for instance, even though bonds make up 40% of the capital allocation, most of the risk, which can be more than 90%, can come from the 60% invested in stocks. That’s because stocks are significantly more volatile than bonds. This means that the portfolio’s fate still heavily depends on how equities perform. Risk parity aims to equalize the risk contribution of each asset class. That often requires allocating more money to lower-volatility assets like long-term bonds and less to high-volatility ones like equities. When risks are balanced this way, the portfolio becomes more resilient. Instead of riding the highs and lows of a single asset, it reacts more smoothly to different market conditions. This approach also allows for the use of leverage in some cases, particularly with low-risk assets, to help improve returns without increasing volatility beyond acceptable limits. Risk parity doesn’t eliminate risk; it redistributes it in a more intentional and structured way. IV. The Core Components of the All-Weather Portfolio At the heart of the All-Weather Portfolio are five key asset classes, each chosen for its ability to perform well under specific economic conditions. This isn’t just about picking investments that “diversify” on paper. Each component has been deliberately selected to fill a particular role as the economy cycles through its normal phases – some shine when the economy grows, others when it contracts, and others still when inflation unexpectedly spikes. The main benefit of this approach is that it can work without requiring any forecast. We have nothing against forecasters, and we all need to plan. But it can become a problem when we rely on a forecast to make an investment decision. We may desperately want a forecast to turn out true, but at the end of the day, it might not matter. These assets are combined in such a way that no matter

Retirement planning is one of the most important financial decisions you’ll ever make. Many financial plans make assumptions about longevity, but planning for an excessively long life can lead to unnecessary underspending, while underestimating lifespan can result in financial shortfalls. Three important risks center around: Investment Risk – The variability of market returns can impact retirement income. Inflation Risk – The purchasing power of money may decline, and failure to account for inflation properly can lead to financial strain. Longevity and Mortality Risk – The uncertainty of lifespan impacts how retirement assets should be managed.  The important questions focus on longevity risk (outliving resources) and mortality risk (one spouse dying earlier than expected and reducing household income). These two risks create a dilemma in retirement planning. How Long Should I Plan For Retirement? If you underestimate your lifespan, you risk running out of money. If you overestimate, you might live too frugally and miss out on enjoying your wealth. Most financial plans default to assuming a 30-year retirement, with a fixed lifespan to age 90 or 95. However, this one-size-fits-all approach can create financial risks. A smarter strategy considers longevity risk, mortality risk, and retirement income sustainability. In this comprehensive guide, we will go over: How long people are living today (historical trends in life expectancy) The risks of outliving your savings (longevity risk) The financial impact of losing a spouse early (mortality risk) The best strategies for a sustainable retirement income Common retirement planning mistakes to avoid By the end, you’ll be better equipped to plan for a retirement that lasts, without overspending or underspending. How Long Do People Live? Understanding Life Expectancy Trends To plan retirement correctly, you must first understand how long people live today. Life Expectancy Over The Last Century In 1900, the average life expectancy at birth in the U.S. was 47 years. As of 2020, it’s nearly 80 years. Source: CDC, Social Security Administration, mortality.org More importantly, life expectancy increases as you age. Please keep in mind these are averages, but if you’re 65 today, you have a 50% chance of living to 85. A 65-year-old couple has a 50% chance that at least one spouse will live past 90. 25% of 65-year-olds will live to 95 or beyond. To put this in perspective, consider the individual who was 65 in 2020. They were born in 1955. In 1955, their life expectancy was probably a little over 68 years. Now, at age 65, their life expectancy is 85 years, 17 years longer on average. This data proves that planning retirement to 95 is not extreme – it’s realistic for many people. Why Traditional Life Expectancy Assumptions Fail Most retirement plans use a fixed life expectancy, usually age 90 or 95, to determine how long income needs to last. While this seems safe and conservative, it often leads to oversimplification, rigid planning, and missed opportunities. Retirement isn’t a one-time calculation. Life expectancy isn’t a single number. It’s a moving target that changes as you age and as your circumstances evolve. Just as investment plans are regularly reviewed and updated, your retirement timeline should also adjust based on real-life developments: health status, medical advances, family history, and lifestyle changes. For example, if you’re 65 today and healthy, the fact that you’ve already reached 65 improves your odds of reaching 85, 90, or beyond. But most traditional plans never revisit that assumption. They set it and forget it. The result? Retirees either underspend out of fear or overspend by assuming too much certainty. Here’s why fixed life expectancy assumptions fall short: Life expectancy increases with age. If you make it to age 70, your life expectancy is no longer 85; it has increased. Fixed models ignore this progression. Health and lifestyle play a major role. Non-smokers, physically active individuals, and those with healthy diets typically outlive the averages. A 65-year-old in excellent health could easily live 25 to 30 more years. Family history matters. If your parents and grandparents lived into their 90s, your personal odds of longevity are higher than average. This nuance is rarely reflected in traditional plans. Higher income and education correlate with longer life. Studies show that individuals in the top income quintiles live significantly longer than those in lower ones. Yet most life expectancy assumptions are based on general population averages. Static planning ignores medical and technological advancements. Innovations in medicine, diagnostics, and treatments extend lifespans. A fixed plan doesn’t account for progress that may add years to your life. Psychological behavior skews decision-making. When clients see a retirement plan that ends at age 90, they subconsciously think of it as a finish line. That can distort spending behavior by either being too cautious or too reckless. To improve accuracy and confidence, your retirement plan should treat life expectancy as a dynamic probability, not a static endpoint.  The Two Biggest Retirement Risks: Longevity vs. Mortality Longevity Risk: What If I Live Too Long? One of the most overlooked dangers in retirement planning is the longevity risk, which is the risk of living longer than expected and running out of money as a result. While it may seem like a “good problem to have,” it can be financially devastating if not planned for correctly. Many retirees assume they’ll live into their 80s and base their savings and withdrawal strategy accordingly. But the truth is, you could live 10 to 15 years longer than expected, especially with improvements in healthcare and genetics working in your favor. Without a flexible, sustainable income strategy, these extra years can put serious stress on your portfolio. This is, by far, the biggest concern we see with investors nearing retirement.  Example: Jane’s Retirement Plan Jane, 65, retires with $3.5 million in savings. She plans for a 30-year retirement (to age 95). She withdraws $120,000 per year from her IRAs to help cover expenses. If she lives beyond 95, she could run out of money. The problem? Jane doesn’t know if she’ll live to 75 or 105. A 30-year retirement is no longer rare. If your plan only anticipates 20 to