Building a portfolio with an optimizer takes minutes—and the results often look great on paper. But the real challenge is understanding how that portfolio is likely to behave over time, based on historical data.

Advisors must be able to explain an investment’s “personality” so clients know what to expect in both good markets and bad. A major part of that is volatility risk, commonly shown through standard deviation. But standard deviation only tells part of the story. To fully understand volatility risk, you also need skew and kurtosis. They reveal how returns behave in extreme markets—not just how much they move, but which way, and how often.

In investing, feelings often lead us in the wrong direction. Greed makes people buy at the top, fear drives them to sell at the bottom, and comfort keeps portfolios stuck in place. That’s why iQUANT.pro follows a belief called Investment Objectivism — the idea that logic, not emotion, should guide every decision. Using a rules-based, data-driven approach, iQUANT filters out the noise and focuses on what’s real. When the market crashed in 2020, many investors panicked and sold, only to miss the rebound. Others chased hype stocks in 2021 and paid the price. These aren’t one-offs — they’re patterns. iQUANT’s discipline-based models aim to avoid those traps and have consistently delivered benchmark-appropriate alpha over time, because in the markets — just like in math — the truth doesn’t bend to feelings.

iQUANT pre-built portfolios use historical standard deviation as the primary risk measure instead of maximum drawdown or returns due to its higher repeatability. Standard deviation has a 0.9 correlation with future volatility, while maximum drawdown has 0.5 correlation with downside risk. Historical standard deviation explains 85% of future volatility, compared to less than 50% for return-based measures.

Portfolios are Traditional or Dynamic. Traditional portfolios have fixed stock-bond allocations, while Dynamic portfolios adjust based on targeted risk levels. Advisors choose between Target Risk portfolios, which maintain specific risk levels, and S&P 500 Directional portfolios, which track market movements.

Using data-driven models, iQUANT helps advisors manage risk with a time-tested and justified investment process.

Tired of chasing returns like a dog chasing its tail? Every year, the same pattern repeats—models get abandoned, strategies get swapped, and investors end up buying high and selling low (again). If market timing worked, we’d all be billionaires by now. But instead, the data keeps proving one thing: sticking to a well-constructed allocation beats emotional decision-making every time.

Yet we’ve witnessed advisors jump ship on solid strategies like the Recession 10 model in 2023 or International Titans last year, only to miss out on double-digit gains. So, if you’re looking for a surefire way to underperform, keep switching strategies. Otherwise, stick around—we’re about to break down why staying the course is the only real winning play.

Over the past decade, U.S. stocks have led the market, but history proves that international stocks—both in developed markets like Europe and Japan and emerging markets like China and India—have also had their moments of outperformance. The key question now: Are international stocks poised to take the lead again?

If your investment portfolio isn't mirroring the S&P 500's performance, it may be because your portfolio includes investments beyond domestic mega-cap stocks. The S&P 500 is a market-cap weighted index dominated by large tech companies, so comparing your portfolio to this index may not be realistic. To closely track the S&P 500, consider a portfolio composed only of domestic large-cap stocks. However, for long-term efficiency, a diversified portfolio may be a better choice, even if it doesn't always align with the S&P 500's short-term performance.

As an investment advisor, it’s your job to understand how a strategy works and ensure your clients do too. Focusing solely on growth can lead to confusion if an investment behaves differently from market expectations. By considering metrics like capture ratios, betas, and correlations, you can manage expectations, avoid surprises, and build trust, ensuring investments align with your clients’ financial goals.

With rising prices continuing to put pressure on both businesses and consumers, the new administration is leaning on a "drill, baby, drill" approach to boost oil production and ease economic strain. History, like the oil crisis of the 1970s, reminds us that supply-side solutions alone aren’t enough—they need to work alongside broader strategies. Today’s combination of high demand, tight supply, and soaring interest rates highlights the need for smart, focused energy policies to help stabilize costs and support growth.

High returns can be exciting, but they don’t always mean an investment moves in step with the broader stock market. Taking the time to evaluate correlations helps you understand how an asset behaves in different market conditions. This insight is key to setting realistic expectations and building trust with your clients by ensuring they’re fully informed about the risks and potential outcomes.

For many, investing in the stock market means making educated guesses about an inherently uncertain future. Despite this unpredictability, certain economic indicators have consistently helped identify potential market trends. By analyzing their timing, patterns, and critical levels, advisors can gain valuable insights into market behavior. In this blog, we discuss five indicators that have stood the test of time.

Rebalancing plays a crucial role in portfolio management, helping keep investments aligned with your clients' objectives and risk preferences. While many advisors rely on strategies like time-based or threshold rebalancing, there’s a powerful alternative to explore: combining time-based rebalancing with percentage-based upper and lower allocation limits. This method brings added structure, flexibility, and discipline to portfolio management, all while minimizing unnecessary trades.

Market downturns can be unsettling, but they also offer a chance to reinforce smart investing habits. Advisors are instrumental in guiding retail investors toward strategies that withstand volatility and reduce losses. Mistakes like panic-selling, fleeing to cash, or holding onto poor investments can derail long-term goals. The iQUANT Portfolio Optimizer helps advisors create diversified, low-correlated portfolios that reduce risk, stabilize returns, and encourage discipline.

As Bitcoin continues to gain traction, investment advisors are increasingly exploring its role in traditional investment portfolios. Known for its high volatility, Bitcoin’s moderate-to-low correlations with stocks, bonds, and gold make it an appealing tool for diversification. By understanding Bitcoin’s unique performance metrics—like its capture ratios and distinct correlation levels—advisors can strategically balance portfolios to include growth potential without overloading on risk.

Many investment advisors rely on basic metrics like top-line beta and correlation to gauge investment risk and movement relative to the market, yet these single values often paint an incomplete picture. iQUANT challenges this by analyzing beta and correlation separately in both rising and falling markets, providing a clearer view of an asset's true behavior. This refined approach uncovers nuances—like an investment’s resilience in downturns or amplified growth in bullish periods—that are often missed with top-line numbers alone. iQUANT’s insights offer advisors a more accurate way to align investment choices with clients’ needs for growth and stability.

Understanding how political landscapes impact market performance can be a powerful tool for investment advisors aiming to make smart decisions for their clients. This blog explores how different political scenarios—like Republican or Democratic control or a split Congress—have historically influenced returns in certain market sectors and equity styles. Using decades of data from major sources like Morningstar, S&P Capital IQ, and Bloomberg, advisors can better align their strategies with political cycles, helping portfolios stay strong and take advantage of growth opportunities linked to government policy changes.

The traditional 60/40 portfolio—60% stocks and 40% bonds—has long been a cornerstone of balanced investment strategies, but recent market shifts have led advisors to reconsider its makeup. Bonds, while stable in the past, have struggled in today's inflationary and rising-rate environment, sparking interest in alternatives like gold. Gold, though it doesn't provide income, has historically acted as a strong hedge in times of crisis. A blended approach, such as a 60/20/20 portfolio with stocks, bonds, and gold, may offer a better balance of risk management and returns, allowing investors to adapt to evolving market conditions.

For investment advisors, it's important to understand how equal-weight and cap-weighted strategies differ when building portfolios for clients. While cap-weighted indices often give more weight to larger companies, equal-weight indices distribute exposure more evenly. Over time, these differences can significantly impact portfolio performance. For instance, equal-weight strategies have historically delivered stronger long-term returns across various market segments, such as large-cap, mid-cap, and small-cap stocks. At iQUANT, we prefer the equal-weight approach for its potential to enhance diversification and mitigate risk, helping portfolios perform better in the long run.

Based on conversations we've had lately, it seems like it's that time of the year again to dive into the differences between CAGR (Compound Annual Growth Rate) and Average Annual Return (AAR). While iQUANT relies on the more accurate CAGR to reflect consistent, compounded growth, many traditional investment products and SMAs (Separately Managed Accounts) tend to focus on AAR, which averages annual returns without considering the compounding effect. This distinction is crucial, especially when dealing with volatile market conditions, as CAGR offers a clearer picture of an investment’s true performance over time compared to AAR's often misleading snapshot. Understanding these differences can help you guide clients more effectively, setting realistic expectations and aligning their strategies with long-term goals.

The gap between housing prices and household incomes is widening, making homeownership increasingly difficult for many Americans. While home prices have surged over the years, incomes have lagged behind, with the price-to-income ratio jumping from 3.5 in 1984 to 5.8 in 2022. Factors like high interest rates in the past, the 2008 housing crisis, and supply shortages have all contributed to this issue. To address the problem without relying on government intervention, market-driven solutions such as shared-equity programs, wage growth from private-sector initiatives, and innovative mortgage products can help make homeownership more accessible while stabilizing the broader economy.

As an investment advisor, staying informed about potential economic downturns is crucial for communicating with clients. Three significant indicators—yield curve inversion, the Leading Economic Index (LEI), and unemployment trends (via the Sahm Rule)—are showing signs of risk. The yield curve has been inverted since late 2022, the LEI has been declining for months, and unemployment figures are trending upward, indicating a possible recession.

In times of uncertainty, it’s worth focusing on sectors like utilities, consumer staples, and healthcare, which tend to remain stable during downturns. Advisors should also consider high-quality bonds, dividend-paying stocks, and gold, as they’ve historically performed well in recessions.