Methods of Analysis and Investment Strategies

We use quantitative algorithms both on their own and ones that have been optimized by artificial intelligence, specifically by artificial neural networks.  

Charting

In this type of technical analysis, Finacle’s automated systems look at charts of market activity in an attempt to identify when the market is moving up or down and to predict how long the trend may last and when that trend might reverse.

Risk Associated with Trading Signals and Methods of Analysis

Securities investments are not guaranteed and you may lose money on your investments. Clients should understand that investing in any securities, including following Ai generated trading signals with a promising track record, involves a risk of loss of trading principal.

Management Risk – There is no guarantee that the investment techniques, risk analysis and professional judgment utilized will produce the intended investment results.

Typical investment risks include market risks typified by a drop in a security’s price due to company specific events (such as a poor earnings announcement or downgrade in the credit rating of company bonds) or general market activity (such as occurs in a “bear” market when stock values fall in general). Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market or economic developments. 

There is no guarantee that the IAR’s systems and analysis will be able to avoid future market losses by employing any of their strategies. In addition, if a trading signal goes “risk off” to cash, you should be aware that holding cash may carry the risk that a you will not be invested during periods of positive market performance.

Some managers may utilize leverage. The use of leverage increases the risk to a portfolio. Leverage involves the use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment. Conversely, leverage can magnify the losses of an investment during a down market. Given the potential risk involved, strategies employing leverage may not be suitable for the conservative investor.

Customers who hold long positions resulting from trading signals, have the risks associated with a portfolio that is not actively managed. In particular, these positions may face large and sudden drawdowns during periods of extreme market volatility.

Risk Associated with Specific Securities Utilized

In addition to the risks inherent in the trading signals and market recommendations generated by FinacleAI, there are risks associated with the specific securities utilized within the investment strategies.

Equity Securities: The major risks associated with investing in equity securities relate to the company’s capitalization, quality of the company’s management, quality and cost of the company’s services, the company’s ability to manage costs, efficiencies in the manufacturing or service

delivery process, management of litigation risk and the company’s ability to create shareholder value (e.g., increase the value of the company’s stock price).

Exchange Traded Funds: ETFs are subject to risks similar to those of stocks. Investment returns will fluctuate and are subject to market volatility, so that when shares are sold they may be worth more or less than their original cost. ETF shares are bought and sold at market price (not Net Asset Value) and are not individually redeemed from the fund.

Indexed Funds: Indexed Funds have the potential to be affected by “tracking error risk” which means a deviation from a stated benchmark index. Since the core of a portfolio may attempt to closely replicate a benchmark, the source of the tracking error (deviation) may come from a “sample index” that may not closely align to the benchmark. In addition, while many index mutual funds are known for their potential tax efficiency and higher “qualified dividend income” (QDI) percentages, there are asset classes within these funds or holding periods that may not benefit. Shorter holding periods, as well as commodities and currencies that may be part of a fund’s portfolio, may be considered “non-qualified” under certain tax code provisions.

Alternative Investments: The performance of alternative investments (e.g., commodities, futures, hedge funds; funds of hedge funds, private equity or other types of limited partnerships) can be volatile. Alternative investments generally involve various risk factors and liquidity constraints, a complete discussion of which is set forth in the offering documents of each specific alternative investment. Due to the speculative nature of alternative investments a client must satisfy certain income or net worth standards prior to investing.