HOW DOES THE SMARTER THAN WALL STREET MODEL WORK?
As mentioned, the framework (algorithmic) structure is proprietary, but broadly speaking, it measures the relative attractiveness of each of the assets being studied. Any asset class that has been around for at least 10 years can be part of the study. The only asset class studied within the existing model that isn’t really an asset class is Short S&P 500, since shorting the market is more of a hedge than it is an asset class. The model uses four proprietary measurements built into an SQL database that are price and volume sensitive to determine: 1) if an asset class should even be considered; then 2) what of the asset classes that should be considered is currently the most attractive. The only asset class that is always considered is cash as it cannot generate a negative return within the model and therefore is always measured relative to other asset classes that are in the “to be considered” category.
