| The idea for Alpha Advisor Service,
LLC started after attending an annual portfolio manager conference
hosted by Nationwide Mutual Insurance Company, in Columbus,
Ohio. The subject of how “portable alpha” can be
utilized inside managed portfolios was addressed. We realized
that private and professional investors could benefit by combining
a traditional form of asset allocation with a more active, tactical
approach. The core portfolio would constitute between 50% and
70% of the individuals investment assets and would be selected
using a traditional buy and hold approach. The remainder of
the portfolio could then be selected using a more technical
approach, enhancing the return while maintaining adequate diversification.
The idea of “portable alpha”
might confuse investors, so AAS developed an approach for
building a portfolio of cost effective investments utilizing
portable alpha with both diversification and total return
objectives in mind. This approach, referred to as the AAS
Rating Score, is an extremely versatile technical tool that
can be used to build and manage investment portfolios in a
variety of manners. The AAS Rating Score is consistently applied
to all the categories of investment options detailed in the
twice weekly service. The various investment options included
in the AAS service were selected for their availability across
many custodial providers along with the relatively low costs
and trading restrictions placed upon them. For further information
regarding portable alpha, please read Joan Warner’s
article titled The Case for Portable Alpha published in the
February 2006 issue of Financial Planning. She does an excellent
job of describing an approach to Portable Alpha for the more
sophisticated investor.
The AAS Rating Score can be used to select individual securities
as well as a partial or complete tactical portfolio of actively
traded investments. Another investment strategy would be to
construct a partial portfolio of long-term investments which
is then complemented with a smaller portfolio of actively
traded selections. An investor with a limited amount of investment
capital and limited expertise will be able to master the AAS
approach and build a customized portfolio in accordance with
individual risk tolerances and investment objectives. Professional
investors, faced with having to design and manage a variety
of different portfolios, can utilize AAS analysis to quickly
pinpoint securities for specific client portfolios. Such a
versatile service is only limited by your own creativity and
resourcefulness.
The difference between AAS and other
internet-based research firms is the flexibility AAS provides
to its subscribers. Most services provide basic Buy and Sell
signals and a short list of recommended stocks or funds. Although
sufficient for some, these services don’t take into
consideration varying investment goals and risk tolerance
among subscribers. Being a successful investor requires more
comprehensive research that what the majority of our competition
provides.
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