About Portfolio123

Portfolio123 is a pioneer in the use of technology to develop stock investing strategies. Born in 2004 to invest easier, we just made it significantly better daily!

Since the early 2000s, well before the word “fintech” came into vogue, Portfolio123 has been empowering professional and individual investors to access and analyze sophisticated databases in order to build sensible usable successful stock-selection strategies. While Portfolio123 is not the first firm to supply tools to screen financial data, it jumped first and remains ahead of the pack in providing a full suite of capabilities (screening, ranking, testing, simulation, results analysis, automated portfolio implementation and tracking, and research) priced reasonably and designed for use in the real workaday world of investing.

Stock screening is the portion of Portfolio123 with which most investors are familiar. But it’s just a drop in the bucket compared to its full set of capabilities. In addition to screening, Portfolio123 has”

  • A simple easy-to use Rules Wizard that lets newbies get up and running immediately and doing some pretty advanced things from day one;
  • The ability to mix wizard-generated rules and free-form (power user) rules within the same screen, something that is great at helping you expand your capabilities;
  • Use Fundamental and/or Technical analysis even within the same screen or ranking system;
  • Work with stocks or ETFs or Closed end Funds (CEFs);
  • Develop, test and use what we refer to as “books” (a portfolio of portfolios), which is the way to build a strategy that includes stocks, ETFs and/or CEFs;
  • Create fundamental and/or technical ranking systems;
  • Backtest your ideas;
  • Build, test and use a screen of screens;
  • Develop, test, and use short-selling strategies;
  • Develop, test, and use long-short market neutral strategies;
  • Test the impact of trading costs;
  • Test the impact of using margin;
  • Develop, test, and use strategies involving different weighting protocols (i.e. you can create your own smart beta strategy);
  • Develop, test, and use market timing and hedging techniques.

While the platform’s capabilities are sophisticated, one not need to be a power-user to benefit. Portfolio123’s tutorials, virtual courses, rules-wizards, live support, and active community allow you to start as simply as you wish, and progress, at your own pace, as far as you wish.

Actually, though Portfolio123 is about much more than a set of tools. It’s about a set of ideas. It’s about sensible rational evidence-based investing. It’s about always knowing exactly why you are buying, selling or holding. Cliches, folklore, guru-speak are all pushed to the side an attention  focused on what’s real.

As an example of the difference, consider a simple statement that one wants to invest in companies that have good growth prospects. We need the good growth to occur in the future. But we only know the past. Can we infer that a good track record of (historical) growth is what we should seek? Or is the past too unreliable as a predictor of the future? And what sort of history should we consider? The past year? The past five years? The latest quarter? Is sales growth preferable to cash flow growth or book value growth or earnings growth? Maybe none of this is worth considering. Maybe we should be looking at indications of investment community beliefs and expectations regarding future growth, such as analyst work product or momentum. Gurus have long denigrated the herd, the mob, the rabble, and we’ve all heard of the Ben Graham created and Warren Buffett disseminated mythological manic depressive known as Mr. Market. But such notions come from a time when one had to get financial statements by going to libraries with suitcases full of change for photocopiers or calling companies and begging them to mail the information more quickly than via third class mail. Has Mr. Market gotten smart enough today and sufficiently well informed to be relied on, at least partly, to chime in about future growth prospects?

On Portfolio123, such questions are approached free from pre-conceived beliefs. Users work with ideas by specifying, testing and discovering,.

Portfolio123 as a company embodies and through its platform reflects the following core beliefs:

1.  Although nobody knows how stocks will be priced in the future, we can and do know the kinds of questions investors should be considering in order to enhance the probability of future success.

2.  By empowering investors to create and implement objective strategies that flow from the study of relevant questions, investors are likely to achieve better results than from following fads, current events, emotions, folklore, and so forth.

3.  Investment knowledge becomes valuable only when it can be put to practical use to improve real-world investment outcomes. While Portfolio123 can be used by “quants” to develop, test and refine ideas, that, to us, is not an end but a starting point. Our users translate their ideas (i) into manageable lists of ideas that can be individually studied in depth, or (ii) into fully-implementable portfolios (with realistic numbers of positions and acceptable transaction costs, and for users who wish, automated trading).

4.  There is no single correct answer; different investors with widely differing priorities, temperaments, preferences, etc, can and do succeed. At first glance what seems to be irreconcilably adverse approaches (for example, deep value “versus” technical analysis) are really different components of a unified strategic engine and that investors can succeed using whichever components or combinations they choose — so long as they work skillfully.  Hence we don’t dictate any particular style or approach to our users. Our goal is to help users implement whatever approach they choose as effectively as possible.

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