Ditch the Investing vs Trading Debate. Instead, Position Your Assets to be focused on Macro

Go macro with Allio and build a robust portfolio that’s defensive and consistent over the long term, while also elastic, opportunistic, and alpha-generating in the short term.

Whether an investor came onto the scene during the economic boom of “the roaring nineties,” the early to mid-2000s, or the “return to normalcy” of the 2010s, they’re used to a simple equation. When rates are at zero – or even close to zero – asset prices will go up.

It’s an easy-money environment like this that made both investing and trading approachable, coinciding with the rise of digital traders that allowed many of us to rise with the tide of a stable economy – where opportunities are visible in both the long and short term. But the post-pandemic market has been anything but stable.

It’s not a simple equation anymore. There’s no comprehensive quantitative analysis that is going to shed light on where things will go this year and beyond. In such an environment, volatility and confusion abound.

As a result, many non-institutional investors have split themselves up into two camps. The first plays their digital trading app like a high-stakes slot machine. The second (the so-called “Boggleheads”) have bought a few mutual funds and will check back in when they turn 65.  

So where’s the middle ground?

This is a question that the team at Allio, led by CEO Joseph Gradante, has built their macro investing app around. Their platform is for the long-term thinker who still wants to also find additional alpha within a market that can change overnight.

Powered by ALTITUDE AI, Allio utilizes machine learning in setting risk and return portfolio estimates for those who want to be around for a long time (not just a fun one). This isn’t a set-and-forget portfolio, though. Allio’s long-term thinking is a jumping-off point for short-term adjustments that generate alpha around macro trends.

“People need to realize that we are in a complex environment right now,” Gradante says, “one that needs a macro focus.”

Several macroeconomic variables are considered in this top-down approach. GDP, trade balances, currency movements, inflation, and interest rates are all analyzed before looking at which sectors are forecast to outperform the markets. This global perspective enriches the possibilities of success by expanding the options to include assets and securities that are responding well to global change.

The macro focus recognizes that what’s happening in the environment around an asset can have greater influence than what’s going on within that particular stock. This is something that many investors, and the fintech products they use to trade, often overlook – at peril to both the long and short-term approach.

A short-term trader may see an asset move and not understand why – because there are too many individual macro factors for just one person to consider. The long-term investor (by nature) isn’t interested in investigating these movements at all, missing out on opportunities to generate alpha.

Market Reader has been a powerful institutional tool for solving this problem. The market analytics it provides is captured with a wide lens, and distilled into what’s most pertinent for an investor to know. It’s built to find the macro data that applies to a particular stock in question. 

Allio, wanting to make short-term opportunities accessible to their users, has embedded Market Reader, along with Morningstar, into their app for this very reason. 

Such a model doesn’t just marry trading with investing, it blends the quantitative and qualitative approach to finance. Standing on the shoulders of Allio’s comprehensive AI is a team of capital market experts who diligently seek out the day-to-day macro factors that influence their client’s portfolios. 

Their latest feature, Dynamic Macro Portfolios™, gives clients control of their choices whilst enjoying the support of the financial team (along with insights from Market Reader and Morningstar) to reach the portfolio’s fullest potential. Investors can choose the companies they want in their portfolio within an agreed framework according to risk and growth goals. 

“The macro portfolio takes a global perspective and makes adjustments so even if the market goes down, our users will still be in a good position,” Gradante says. “There is an interesting human psychology element to investing. It is both an art and a science; we have incredible machine learning tools but we also need humans to generate additional alpha. That edge is the extra mile.

“Real-time price execution and real-time data are an important foundation of our Dynamic Macro Portfolios™,” he continues. “No other robo-advisor on the market provides these elements and it allows for more sophisticated diversification.”

After twenty years in the finance industry, including experience at top Wall Street firms, Gradante has now transferred his expertise to the fintech space where he can apply his knowledge. “I learned a top-down approach that allows you to pinpoint key sectors by looking at the macroclimate, particularly monetary policy, political tension, and regulatory issues.”

Allio wraps a technical framework around this philosophy like never before – creating a new paradigm for investing.

In these uncertain times, it’s not about investing vs trading. It’s about being dynamic – and leveraging the latest tools for doing so.

For more information on Dynamic Macro Portfolios™, visit Allio’s website.