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Looking at Active Investing in a New Way



In volatile bear markets, there’s not much glory to be had in sensible index fund investing. No one likes reporting quarterly losses and “stay-the-course” strategies to clients when those same clients are hearing stories of their untrained day trading friends making a killing in the very same market.

Pro investors and clients are also giving more credence to the market’s new normal. Buy-and-hold is a universal principle, but to most people, accessibility equals activity. No one wants to be “Washed Up Warren” selling at the bottom of the airline crash when literally anybody can start a Robinhood account and range trade American Airlines (NASDAQ: AAL) for ultra-quick profits.

To be sure, seasoned investors know that unprofessional active investing turns out bad for most people. Your client’s friends are only reporting the victories to your client, not the losses. Yes, Buffett sold at the bottom of the airlines, but he also made $11 billion in Apple just this year ($47 billion in total). As much sense as the index fund still makes, waiting is still a hard argument to make in the face of FOMO. (You spent years unlearning the fear of missing out; you can’t expect your clients to exorcise it from themselves just because you said so!)

Plus, the client is always right. As a financial advisor, your real job is giving your clients peace of mind with their money. We’re in the Millennial Money generation — the way you make your clients money is just as important as actually making it (hint: impact investing).

We must also take our share of the blame. Passive investing based around index funds looked great over the past 12 years, the longest bull market in history. We are not in that market any more. Proactive investing may be making a comeback for a very good reason — investment strategies must change when the underlying market conditions change.

How Financial Advisors Can Help Investors Who Want to “Do Something Different”

Investment strategies invariably match the lifestyles of the investors, and today’s investment lifestyle is global and diverse. Digital nomads are making good money through virtual offices while traveling the world. Retail traders are moving seamlessly between currencies and cryptocurrencies at will. Savers now have the choice of putting their money directly into foreign banks for higher interest rates without leaving the comfort of home. It makes sense that these investors would want a bit more activity from the financial advisors they choose.


Attribution: Fshoq

Even those living more traditional lifestyles are using the expanded access they have to the markets. Mobile trading app Robinhood (which always seems to be the metric for Millennial Money talk) grew to more than 10 million accounts by the end of 2019. The app now has around 50% of the merged 24 million Charles Schwab/TD Ameritrade client base in less than 7 years of operation.

“A good advisor will also provide planning, tax and other advice,” says Charles Lewis Sizemore, chief investment officer at Sizemore Capital Management. “They can also provide access to strategies that are a little harder to replicate or that haven’t been turned into off-the-shelf commoditized index products.”

To serve this audience is also to help them expand upon their personal knowledge of the market and safely expose them to more exotic investment strategies.

“If a client feels like they have the ‘beta’ component of their portfolio handled, then you can still add value by complementing the core of their portfolio with more aggressive satellite positions or alternative strategies,” says Sizemore. “In my practice, we regularly invest clients in more exotic assets such as put writing strategies, medical accounts receivable and long/short strategies.”

How AI Can Help

Keeping up with a digitally savvy investor means holding an expertise in how artificial intelligence (AI) can help the bottom line. Until someone masters artificial feelings, we can definitely use our robot class to achieve the idyllic emotionless investing we all strive for. A computer’s cold objectivity gives us the opportunity to make better decisions all-around. Plus, we finally don’t have to do all that math.

“We all have ideas about what we could get done, and practices we would put into place — if we had the time,” says Yewno CEO Ruggero Gramatica. “AI gives you the opportunity to automate some of the minutiae of collecting and processing information so that you can get to what really matters — testing new strategies, exploring indirect connections within your portfolio or determining exposure to concepts as they develop.”

Here are just a few of the ways that AI can help active investment strategies:

  • Financial literacy: AI can serve as an investment conscience, showing an alert when an investor participates in a risky trade or targeted behavior.
  • Financial planning: A computer’s long memory can remind an investor of long term goals and support goal based planning.
  • Managing the mundane: Robotic process automation can ensure error free processes, freeing an investor’s time to strategize higher value investment activities.
  • Client interaction: Virtual assistants and chatbots can handle many customer service calls, freeing an advisor’s time. A surprising percentage of people actually prefer chatting with a robot rather than a human.
  • Continuous analysis: Advanced machine learning algorithms learn in real time how to invest and manage a portfolio based on the standards of the investor.

Keep in mind that AI does not replace human interaction, sophisticated analysis or business intelligence, and it won’t for quite some time, if ever. AI can expand the scope and scale of advisory services and make sure that all strategies are appropriately and thoroughly vetted before execution.

Types of Active Investing Financial Advisors Can Offer

Armed with AI and a new perspective on the modern investor, the savvy advisor will be able to incorporate many new types of active investing into strategies.

Attribution: Pixabay

Stock Picking

Stock picking in an active investment strategy does not necessarily equate to picking great companies. Short sellers are actively looking for overvalued companies to exploit bloated P/E ratios and faulty forward guidance statements. Once an advisor understands the purpose of a portfolio, he can begin to actively recommend stocks to fit the strategy.

An active stock picking strategy likely involves frequent rebalancing. Advisors can help investors stay appropriately balanced without overtrading.


Another type of active investing involves buying and selling securities and derivatives around a core portfolio. The core portfolio serves as risk protection for the derivative trades. The active trading is usually meant to pursue alpha while the core holdings follow market returns.

Swing Trading

Swing trading is based on mastering stock entry and exit points. Swing traders are more concerned with technical analysis than a company’s fundamentals, and will often make trades into businesses that are objectively struggling — even businesses that are in open bankruptcy.

The volatility of the modern market means that stock prices will deviate from company value more frequently. As buyers and sellers argue over what the correct price is, the swing trader swoops in, uncaring, and skims off the top.

Volatility Investing

For investors who find no luck guessing a stock’s direction, volatility can be another way to profit. Volatility plays are often directionless, involving a purchase on the long and short side of a security.

Volatility investing is best done through options, derivatives that are created specifically to capture and quantify volatility. However, options bring with them a unique set of behaviors and characteristics that the average investor may not understand. The computers will do the math, so you don’t have to teach that — but teaching your investors about the Greeks (all of them, minor Greeks included) is essential.

High-Frequency Trading (HFT)

If your client has a technological advantage and understands the intricacies of making a market, HFT can be a very profitable way to actively invest. Understanding software latency and market inefficiencies are more important here than knowing whether a company will meet its Q2 revenues.

The proliferation of trading technology has given investors outside of the elite hedge fund community an opportunity for HFT. With the right advice about the core of market operations, you could expand these efforts.

Platforms to Guide Financial Advisors

Who’s going to advise the advisor? There are actually many platforms dedicated to supporting you as you support your clients.

Attribution: Flickr

Yewno | Edge

If you’re looking to ruthlessly cut the noise away from investment research, Yewno specializes in focusing on the most relevant institutional level data. You get access to firsthand news and analysis sources in real time and automated anomaly detection. Your clients benefit from the inside analytical track that will help you more accurately connect the dots between market events and suggested investment concepts. Artificial intelligence processing builds a portfolio around your ideas, including blockchain and cloud computing portfolios. “Using Yewno | Edge helps me to research trading opportunities and it allows me to search fast and efficiently,” says Andrew Roderick, CEO of Credit Repair Companies.


MoneyGuidePro has been a financial planning software market share leader for decades. Since 2001, it has succeeded through an intuitive user interface and portfolio gamification (the Play Zone). Clients can experiment with ideas while advisors retain control of the environment, giving a client the ability for guided speculation without using real money. MoneyGuidePro also integrates easily with more than 40 third-party financial programs.


Although RightCapital is a relatively new product, it has quickly impressed advisors looking for a comprehensive platform with a balance between automation and customization. Advisors can easily create engaging visuals for clients, which works well for budgeting multiple portfolios.

Black Diamond

Black Diamond is a desktop and mobile portfolio management platform based in the cloud. Advisors get easy access to customized reports, daily account reconciliation, secure messaging and consolidated information layouts. Active investors will enjoy a personal connection to their advisor that otherwise tends to get lost in the digital realm.


WealthTrace is known as a platform for personal investing strategies — retirement, college savings, first house — but it adds an intuitive scenario function so investors and advisors can see how plans play out in adverse market conditions. In terms of personal finance advising, WealthTrace is perhaps the most comprehensive platform. It leaves no stone unturned when formulating its life scenarios. Everything from life insurance to retirement nest egg goals are factored in.

Look at Active Investing in a New Way

Traditional wisdom sees active investing as dangerous and ultimately less profitable than more passive strategies. With new technologies and processes available to us, that doesn’t have to be the case.

In most cases, it’s not an advisor’s job to determine an investor’s philosophy. An advisor guides an investor safely to a financial destination while accounting for and using an investor’s philosophy. The advisor, in a way, must be a jack of all trades. It helps to have a bevy of tools to help guide the guide.

“All investing is active,” says Phil Kernen, Mitchcap portfolio manager. “We believe the best investing happens when advisors and their clients acknowledge that investing mandates a cycle of active decisions.”

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© 2020 Benzinga does not provide investment advice. All rights reserved.

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Gov. Reynolds announces assistance to low-income Iowans in preventing eviction or regaining housing



DES MOINES, Ia. (KMTV) — Statement from the office of Governor Kim Reynolds

Governor Reynolds today announced that a total of nearly $9 million in assistance is available to eligible low-income Iowans who are at imminent risk of eviction and individuals who have lost housing to quickly regain housing stability. The funding will also provide support for homeless shelter operations. The funds are made available through a supplemental appropriation to the Emergency Solutions Grant program through the federal CARES Act.

“Throughout the pandemic, our focus has always been on protecting the lives and livelihoods of Iowans,” said Gov. Reynolds. “The funds announced today will assist those at risk of eviction while also providing support to homeless shelters supporting Iowa’s homeless population at this critical time. I appreciate the continued collaboration with our federal partners in support of the state’s pandemic response.”

“Providing housing assistance for Iowans in need remains a top priority,” said Iowa Finance Authority Executive Director, Debi Durham. “The ability for Iowans to thrive and prosper begins with a safe, stable place to call home and the program announced today will be essential in helping Iowans get back on their feet.”

The Emergency Solutions Grant program will help to prevent households from becoming homeless due to eviction, assist Iowans who have lost their home to eviction to regain rental housing as well as provide homeless shelters with financial support to assist with operations and outreach as they work to serve Iowans in need and mitigate the spread of COVID-19.

To be eligible for eviction prevention assistance to avoid homelessness, Iowans must have an income of 50% of the area median income or less and be at imminent risk of eviction in addition to meeting other eligibility criteria. To be eligible for assistance in rapidly regaining housing, Iowans must be currently experiencing homelessness.

Examples of assistance available to eligible individuals include rent and utility payments, including in arrears, legal assistance, application fees, security and utility deposits, moving costs, case management and credit repair. All financial assistance is paid directly to landlords and service providers.

Individuals in need of assistance must apply through the Coordinated Entry helpline in their area, which is available along with additional eligibility and program information at

Thirty-five agencies were awarded a total of $8.8 million in Emergency Solutions Grant Program funds. The full list of awards is available here. The assistance will remain available until all funds are exhausted or September 30, 2022.

The Emergency Solutions Grant program is administered by the U.S. Department of Housing and Urban Development and the Iowa Finance Authority in partnership with participating Iowa service agencies.

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Dovly, the Credit Repair Engine, Welcomes Todd Davis, Co-Founder and Former CEO of LifeLock, to Advisory Board



PHOENIX, Dec. 3, 2020 /PRNewswire/ — Dovly, the credit repair engine that tracks, manages, and fixes your credit, today announced the appointment of Todd Davis, co-founder and former chief executive officer (CEO) of identity protection leader LifeLock, to its board of advisors.

“Todd is one of the most innovative marketers and business leaders in the personal finance industry,” said Nirit Rubenstein, CEO and co-founder of Dovly. “His unique understanding of consumer mindsets and financial technology enabled him to create and scale a transformational business. His insights will help us take Dovly to the next level.”

“Millions of Americans have at least one serious mistake on their credit reports,” Todd Davis, co-founder and former CEO of LifeLock, explained, “yet far too many of those people aren’t even aware of it, nor do they understand the impact these mistakes have on credit scores. Dovly is a game changer.”

After launching his career with Dell in the early 1990s, Davis co-founded LifeLock in 2005. Five years later, the company ranked eighth on Inc. Magazine’s list of the 500 fastest growing companies in America, and in 2012, the company went public. By 2014, LifeLock had over three million subscribers and 700 employees. Symantec acquired the company in February 2017 for $2.3 billion. Davis now serves as chairman of the board of Kadenwood and Aesthetics Biomedical.

Dovly also welcomed Jacky Chiu, the former vice president of product of LifeLock, to its advisory board. Chiu is the co-founder and chief technology officer of Brightside, a financial technology company that recently secured a $35 million series A funding round led by Andreessen Horowitz.

About Dovly

Dovly is an advanced credit repair engine that tracks, manages, and fixes your credit. Dovly’s fully automated technology enables customers to get ahead financially by leveraging credit intelligence to repair credit scores. The company is headquartered in Phoenix, Arizona, and has increased its customer base by 160% this year alone. In June of 2020, Dovly raised a $2.25 million round of seed funding led by NFX, with participation from 1984 Ventures.

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Black Lives Matter job fair aims to provide economic opportunity in Polk County



LAKELAND, Fla. (WFLA) – Black Lives Matter organizers in Polk County are putting together a database to help lead people on the path to economic opportunity.

“I do a lot of things. General contracting, general clean up,” Tony Jones, of Lakeland, told a local recruiter.

Tony Jones, who lives in Lakeland

Jones is a veteran looking for a job. He served four years in the U.S. Army.

He wants to work, just needs an opportunity.

“You can’t pay no bills and eat if you’re sitting at home waiting for somebody to hand you something. You gotta get out and get it,” he said.

Jones came to the Dream Center in Lakeland to try to take those steps at a job fair organized by Black Lives Matter Restoration Polk Inc.

Black Lives Matter advocates protested to end police brutality this summer in Lakeland and all across the world with the ultimate goal of social justice.

“What’s going to happen next with Black Lives Matter after the marching and the rally? For us, it’s providing economic opportunity,” said Jarvis Washington, President & Founder of Black Lives Matter Restoration Polk Inc.

Wednesday’s job fair event launched Washington’s economic initiatives.

“We’re going to be working on the personal growth of the individual. We’re going to be helping them on everything from the mentoring program, credit repair programs, teaching them money management,” he said.

BLM partnered with Civitas Recruiting for the event.

Susan Freebern created the organization a few months ago to help community leaders steer under-served communities to good-paying jobs.

“They don’t know where to go to get these kinds of jobs. They don’t feel like they’re offered these kinds of jobs through regular staffing companies. I’m just going to go find those jobs and bring them to them,” she said.

On Wednesday, Civitas Recruiting and Black Lives Matter Restoration Polk gathered information to recruit workers for future projects through the Work Opportunity Tax Credit program.

“Nothing’s gonna be fixed overnight or taken care of. I think we just need to all strive together, make positive steps. That’s all you can do,” Jones said.

To sign up for the program click here.

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