About Stock Following®


Stock Following® is a proprietary approach and investing system aimed at helping active investors to significantly outperform the major indices, such as S&P 500, Dow Jones and Nasdaq Composite, in both bull and bear markets.

Introduction

The Stock Following® approach to investing was as individual research project developed by a Financial Economics student while attending Columbia University in New York from September 2010 to May 2016. The essence of the Stock Following® is to eliminate or minimize the element of uncertainty by reducing the human factor in active investing.

The task is achieved by five different means:

  • First, Stock Following® postulates the impossibility of traditional market timing at a level sufficient to produce a long-term return higher than that of the S&P 500, and proposes the concept of following, reflected in the name of the approach.
  • Second, Stock Following® offers a core set of principles that need to be implemented to make strategies suitable for active investing.
  • Third, Stock Following® requires the additional “speculative” level to be implemented into traditional investment strategies (being a natural protection from the investor itself).
  • Fourth, Stock Following® includes a number of proprietary and open techniques for reducing human factor.
  • Fifth and finally, Stock Following® imposes restrictions on investment instruments limiting one to the instruments that have a reasonable potential for growth: 1- in the medium or 2- in the long term (such as indices reflecting the long-term growth of the stock market, or fast-growing US stocks).

In other words, Stock Following® offers a truly dynamic yet rigid framework the individual limitations of which offer the opportunity to earn an abnormal rate of return, known as alpha.

Stock Following® Pyramid

Stock Following® does not refute the traditional methods of technical and fundamental analysis but considers them insufficient to beat the stock market in the long-term.

To create alpha, Stock Following® expands traditional investment strategies by adding an additional "speculative" level, effectively turning them into Stock Following® investing systems.

Technical Analysis
Fundamental Analysis
Fundamental Theory of Speculations
Approach
Fund
Investing System

Cornerstones and elements

The Stock Following® pyramid consists of three cornerstones and a number of elements that have the following functions:

#
Item
1
The first cornerstone of the pyramid is the "Fundamental Theory of Speculation," a theory that determines the conditions under which a market participant can reasonably expect to earn an abnormal rate of return (alpha). Investors lay down this "stone" by either subscribing to the signals of following one of the pre-built strategies, by ordering strategy development services, or by creating a strategy on their own using the Stock Following® principles.
2
The second cornerstone is the Stock Following® approach, consisting of three elements (strategic tasks, principles and techniques), and it is sufficient to create both an investment strategy and all other elements of the investing system.
3
To implement the project, investors build the Stock Following® fund – a hypothetical organization with 1) well-defined long-term goals, 2) an individual investment system capable of achieving these goals, and 3) charitable activities.
4
The Stock Following® investing system – a set of instructions for achieving the fund's objectives (long-term goals) and representing a rigid framework (within which all investment activity is carried out) is the third cornerstone of the Stock Following® pyramid.
5
Fundamental analysis performs at Stock Following® although important, but a limited by the set of rules imposed by the Investing System role. This is where the “principle of choosing tools” is coming from. In some cases, fundamental analysis can even be neglected if one can achieve the fund’s goal by investing in the general market (as it is the case with pre-buit investment strategies).
6
Technical analysis, although it is applied, is a means of solving applied problems, and (as a rule) is not used in decision-making.

Implementing Stock Following®

Stock Following, Inc. provides services and solutions designed to facilitate the process of building and implementing Stock Following®-based investment strategies.

Those interested in implementing Stock Following®, we recommend the following scenario:

(1) Decision
Decide whether you are building a new investment strategy or improving the existing one.
(4) Fund
Investing System
Long-Term Goals
Strategy
Infrastructure
The Right Game
Philanthropy
(5) Results1
Abnormal Rate of Return (Alpha)

32.25%

vs. 6.25% S&P 500
as of August 16, 2018

Developing Your Own Investment System

Education2
Yourself
Our Services
Method
Building an investment system yourself using available resources.Building an investment system within educational course.Ordering strategy evaluation, implementation, and creation services.
Difficulty
HardMediumEasy
Cost
LowestAverageHighest
Strategy type
Based on prebuilt strategiesBased on prebuilt strategiesCustom
Resources
Get StartedGet StartedGet Started

Do Not Know Where to Start?

Stock Following, Inc. offers educational and professional services intended for investors seeking to implement Stock Following® principles into their investment strategies, including: consulting, strategy development, and building investing infrastructure (office).

Contact us for more information.

My Stock Following®

               

Important Disclosure

StockFollowing.com (“Stock Following” or “Stock Following, Inc” or “we” or “us”) is an informational and educational financial website, and is not a registered investment adviser. Stock Following relies upon the “publishers’ exclusion” from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. StockFollowing.com does not guarantee results. All information provided on this website is general in nature and is not tailored to any individual investment objectives, strategies, or needs, or relate to any specific investments. Information and services provided herein are not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable. However, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. By using this website, you agree to the Terms of Use and Privacy Policy, which may change at any time.

  1. Hypothetical results of a pre-built Stock Following Long-Term Investing strategy. []
  2. Recommended (see Frequently Asked Questions for more information). []