Round Pond Capital, Inc. (RPC), a registered investment adviser, was established in 2008 to fill a niche in the investment business. RPC focuses on mechanical trading systems that use end-of-day data to generate trade signals. The systems used include some that were built in-house as well as systems developed by other individuals and professionals.
Active management of a portfolio is not the same as being
reckless or imprudent. Actually, it is
the opposite. The key to consistent, superior
returns in the financial markets is to avoid being long during the bear market
periods. Those periods do exist and can
be quite damaging to a portfolio. Look
at these stats for the S&P 500 for the last six decades:
Investing on the long side at the appropriate times and avoiding the large draw down periods are imperative to realizing consistent, positive returns. You can enhance your returns further by using shorting strategies or investing in contra exchange traded funds (ETFs) during bearish periods.
RPC prefers using multiple systems in a portfolio in order to minimize draw downs. This is accomplished by using systems that trade different securities and that also get their signals from different variables or strategies.