In this month’s update…
December and 2023 Performance Review
Meta 30 vs Meta 50 - Which is Better?
Improved Execution
Pricing & Discounts
Jan 17th Webinar: Get Your Questions Answered!
The S&P 500 equity index (SPX) continued its rally in December and finished up 4.6%. For the year, it recovered much of its losses from 2022 and finished up +24.2% in 2023. Four of InvestiQuant’s six autotrading programs also added gains in December and finished at new all-time highs. All six iQ autotrading programs finished with double-digit returns for the year. The iQ Meta 50 program was our best performer in 2023 with a +70.3% gain ($35,149 gross profits) in live trading.
Overall, 2023 was a solid year for iQ Autotrading, especially when one considers it was on the heels of generating high double digit gains in 2022 (while stocks sold off). Clients’ satisfaction last year varied greatly depending on the program they licensed as net gains varied greatly ranging from breakeven to north of 60% percent. However, no matter which InvestiQuant program a client licensed 2 years ago, their net gains have trounced the stock market and provided a stabilizing function for their portfolios. And, keep in mind, these gains have occurred during two <completely> different market environments.
* Based on composite (live & simulated data) and suggested funding. Does not include license fees - which start at $3,900 - see pricing below. Past performance may not be indicative of future results. View full performance & disclaimers here. Larger programs available for family offices - email: [email protected].
Pat yourself on your back... if you became an iQ client at the end of 2022 and stayed the course with your investment for the entirety of 2023. Sadly some of your peers bailed after the rough start to the year (for some of our autotrading programs). For example, Meta 30 declined 26% last January through February and then generated over 38% the next 10 months. We can not stress this enough: even the very best algorithmic trading strategies can and do suffer drawdowns and periods of non-performance that are COMPLETELY RANDOM AND CAN NOT BE AVOIDED. Plus, all of our programs have market adaptive functionality. So, as the saying goes, “If you can’t stand the heat, stay out of the kitchen.”
Another observation: We often hear from clients who think of their InvestiQuant programs as simply hedges for their stock market exposure. That is certainly an appropriate and important use of our programs since our strategies have been outperforming bear and volatile markets since the company’s inception in 2008. But, that idea misses the true value-add of our bi-directional programs. While the S&P 500 was in a super bull mode much of this past year (more than doubling its historical average annual return of +10.26%), 4 of the 6 iQ autotrading programs generated more than 17% (net returns after all fees). The average of all 6 iQ programs outperformed the S&P 500’s stellar year of +24.2% with an average net gain of +26.4% in 2023 (after all fees).
The ability to deliver strong returns in rising equity markets, while delivering big numbers in weak markets (like we did in 2022) illustrates the “all weather” capabilities of our sophisticated programs. It’s also why hundreds of investors around the globe trust our solutions as an integral part of their investment portfolios.
A guaranteed ROI? No. A unique, quality portfolio enhancer? Yes.
Pro tip: In addition to their tax advantages, a benefit of investing in iQ programs is that they trade futures contracts and therefore can be funded with less capital than the suggested minimums - without reducing their profit potential. When doing so, returns (ROI) can be amplified. For example, a Select 250 account starting with $150k (40% less than the suggested min.) would have made +21.7% in 2023 (versus +13.0% if starting with $250k). Of course, the opposite is true as loss percentages are magnified too. This technique should only be used by sophisticated investors with risk capital. To see the potential benefit (and risk) of using lower funding levels or combining programs, check out our popular iQ Portfolio Builder and consult your broker to determine suitability.
Why Did Meta 50 Perform So Much Better than Meta 30 Last Year?
A common question we’ve been hearing is why did Meta 50 crush it last year (>70% gains), while Meta 30 put up modest gains(12%) in 2023? Though the 2 programs are highly correlated, they are not the same. Meta 50 trades more aggressively (frequently) by trading when historical evidence is strong, but not quite as strong, as the “home-run” days that Meta 30 pursues.
Let’s look at it empirically: How many times did the S&P 500 futures close at least 60 points beyond the open (more than ~1.25%) in either direction in 2023? (In terms of dollars, these are out-sized days that generate at least $3,000 in profits per contract if you capture them). In 2022 there were 52 of these home-run opportunities (about 20% of all trading days). In 2023, there were only 13 (~5%). As a result, both programs only “hit” a limited number of home-runs, but Meta 50 still was able to score a bunch of runs for its clients by pursuing other attractive opportunities.
Fortunately, with growing geopolitical risks, and a pending high stakes election in the U.S., we are optimistic about 2024 - not only for Meta 30 and Meta 50, but all of our programs as volatility is the fuel that drives all iQ autotrading gains.
New for 2024: Improved Execution Technology
Our team of quantitative traders rely on the same strategies and programs as our clients, and we are continuously seeking ways to improve returns. Like all years, we spent a considerable amount of time and effort on R&D In 2023. One of our projects was focused on increasing the “average net gain per trade” by improving our algorithms’ trade execution. Ultimately, we decided to implement a 3rd party solution from a Wall Street firm providing advanced execution solutions to some of the most successful derivatives trading companies in the world. In Q4, we started integrating this advanced algo into the Meta 30 program. We are beginning to implement it in the other program this month.
As a result, our clients at The Fox Group/StoneX will begin seeing a $.75 fee per execution on your statements. None of us want extra fees, but in this case think of it as paying $.75 for an additional ~$15 (or more) of incremental profits per trade. Over the course of a year, we anticipate these small gains will add up to thousands of dollars that we will all capture with this sophisticated execution technology. Note: this solution requires a different type of execution block, so real-time reporting of trades (that some clients see) will no longer be available. However, the normal daily and monthly statements will still be available and accurate.
Did You Know?
Although certainly possible, it is unusual for any of our programs to not generate positive returns over a traditional calendar year. Of our 6 programs, Trader is the only program that has had a negative year (-6.2% in 2021) in live trading.
Reminder: As always, past performance may not be indicative of future results and trading programs may not be appropriate for all investors.
Pricing and Discounts
iQ Autotrading programs are licensed annually and fees equate to a small percentage of each program’s Average Annual ROI. Prices currently range from $3,900 - $9,900. Request details and payment options here. Discounts are available for veterans of the military and law enforcement. Volume discounts are available for family offices and large investors, email [email protected] for details. Client referrals are one of our top generators of new clients. If you know someone who needs more (or better) diversification, make an intro and we’ll do the rest. You both will save $500. Contact [email protected] for details.
Want To Learn More?
If you have questions about iQ Autotrading or would like to request a 1-1 call/meeting with Matt, email matt@investiquant.com. You can also schedule a Zoom call/meeting with me here. Or, get your questions answered at our upcoming webinar next week.
February 14: Get Your Autotrading Questions Answered!
Thought of the Month
"The secret to getting ahead is getting started."
- Mark Twain
Invest Smarter. Every Day.
Scott Andrews
InvestiQuant.com
CEO & Head Trader