Intelligent Investing LLC is an investment advisory firm that utilizes quantitative analysis and algorithmic trading strategies to invest client assets. As algorithmic and quantitative trading strategies become increasingly popular, many investors are curious about firms like Intelligent Investing that embrace these newer approaches. In this article, we will provide an in-depth review of Intelligent Investing, evaluating its investment strategies, performance history, fees, and overall client experience. With algorithmic trading on the rise, it is important for investors to understand both the potential benefits and risks of working with firms like Intelligent Investing that focus on quantitative strategies and black box models.
Intelligent Investing relies on data-driven quantitative strategies
Intelligent Investing bases its investment approach on quantitative strategies driven by data and algorithms rather than human discretion. The firm claims to remove emotion from the investing equation by systematizing the investment process. Its strategies are based on statistical arbitrage models that aim to capitalize on short-term mispricings in the market. While performance chasing is avoided, their models do incorporate momentum signals. Their black box models continuously scan the market for new opportunities. This quantitative approach may appeal to investors who want strategies firmly rooted in data and systems instead of individual stock picks.
Strong track record across multiple market environments
Intelligent Investing has built a strong performance track record across different market conditions. Its flagship quantitative strategy has outperformed the S&P 500 substantially over the past 5 and 10 years. While some quant strategies fell apart during the COVID turmoil of early 2020, Intelligent Investing managed to navigate those volatile months successfully with minimal drawdowns. However, investors should be cautious about expecting similar outperformance going forward, as all winning streaks do eventually come to an end.
Fully automated algorithmic trading and execution
In keeping with its quantitative focus, Intelligent Investing handles all trading and execution in a fully automated, algorithmic manner. Their algorithms submit orders, manage trades, and rebalance portfolios automatically without human intervention. This hands-off approach minimizes the impact of emotions and human discretion on order execution. However, some investors may prefer to retain more human oversight of trading rather than relying entirely on black box algorithms.
Higher fees compared to traditional advisory services
Intelligent Investing charges advisory fees significantly higher than traditional investment advisors and robo-advisors. For its flagship quant strategy, management fees amount to 2% per year compared to the ~1% or less charged by most competitors. Intelligent Investing justifies its higher fees by pointing to its robust research capabilities and specialized focus on quantitative strategies. However, the much higher fees could eat substantially into long-term returns and net performance for clients. Investors need to determine whether the firm’s sophisticated strategies are worth the steeper fees.
Overall, Intelligent Investing is a solid option for investors who are comfortable with quantitative strategies and want to invest in specialized algorithmic models. However, the higher fees, black box models, and fully automated trading may not appeal to investors looking for a more traditional or personalized advisory experience. As with any advisor, investors should carefully weigh the pros and cons before entrusting their hard-earned assets.