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Strategies

Our investment philosophy is based on three core ideologies, built on cutting edge research and experience.  By applying these ideologies, we seek to deliver sustainable and significant value to our members through utilizing indexes of global markets, commodities and cryptocurrencies.

Overview

I. Fundamental Economic Theory  

Sound economic and financial theory govern the foundation of our research, strategy, and execution to help us deliver repeatable results. 

II. Systematic Investment Methodology

A disciplined and scrupulous process underlies everything we do.  Our investment methodology is based on a rigorous process of design, refine, test, repeat.  

III. Indiscriminate Market Mentality

A myriad of different instruments, rarely acknowledged outside the highest echelons of financial theory, provide dramatic insight into the global economy.  In portfolio construction, risk management, and trading, we meticulously employ these qualitative and quantitative tools to deliver significant returns.

Trading methodology

We've designed our trading strategy to be both profitable and practical. Statistics prove day trading requires immense amounts of time to generate even a small return.  Meanwhile, buy-and-hold strategies net an average S&P return of 10% per year. Ten percent is great for asset managers and high net worth investors; it's a tremendous amount of money on an eight figure portfolio.  But clients of our online platform are not investing eight figures.  We accordingly maximize the value of every dollar by trading as efficiently as possible - only a few times each month.  Our money is made through capturing large trending moves on the least number of trades possible.  Trades will last an average of 1-4 weeks and are placed at key moments of opportunity to generate significant profit.  We do not trade often but we trade smart.

Full strategies

I. Research

 

Our research investigates and determines the most impactful market signals to our investments.  From global macro trends to inter-market patterns and relationships, we scour the financial landscape to attain every last piece of information relevant to our investments.  Many of the details of our research will remain undisclosed to the general public, but are accessible to our clients within our educational material.

 

II. Analysis
 

Our analysts constantly evaluate investment ideas, monitor ongoing positions, generate financial models, and harness our various databases to offer an informed, meaningful advisory on all active operations.  

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III. Artificial Intelligence 

 

The A.I. algorithm we use supplies critical information in determining trade timing and execution. It is by far our most powerful tool. However, there is no single algorithm which can be created to predict every turn in the various markets we trade. To do such would require total isolation of data which does not exist, everything is connected. There are unexpected external events which can occur and create a panic in a market.

 

IV. Portfolio Construction 

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One to five positions will typically be held at any given time, lasting from one week to three months, diversified amongst the equity, commodity, and cryptocurrency markets.  Positions will often be hedged to mitigate risk. 

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V. Risk Management

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Our risk management approach continuously employs monitoring and benchmark technology to accurately evaluate risk and determine:

  • Trading strategy

  • Balance sheet and leverage

  • Liquidity

  • Operational requirements

  • Loss mitigation

 

VI. Capital Allocation

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A controlled and systematic approach governs the framework for our capital deployment.  These principles are documented and communicated through our Money Management Guide.
 

VII. Equities 

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ETF’s reflecting the United States Stock Market’s major indexes: the Dow Jones Industrial Average, S&P 500, and Nasdaq comprise our equity investments. Owning individual stocks on a long term basis is fine, but with trading over shorter periods of time we prefer to take binary risk out of the equation and stay with ETF's, avoiding individual companies. This way any significant bad news on a individual stock can't hurt us.  By trading individual names on a short term basis you need to be right twice. Once with the overall market direction and second avoiding any individual risk. We occasionally will break this rule for the correct risk reward scenario.

 

VIII. Commodities 

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Over the past two decades, we’ve identified exceptional opportunities in the commodities markets, and will continue to frequently trade gold, silver, and oil.

 

IX. Volatility 

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Investments in volatility and the volatility risk premium provide a suitable hedge for  equity strategies as well as outright standalone strategies.

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X. Cryptocurrency  

 

We capture large trending moves in the cryptocurrency markets primarily through Bitcoin.

 

XI. Investment Vehicles

 

Exchange-traded funds (ETF's):  As the United States stock indexes and precious metals are not individual companies, ETF’s reflect the movements of our traded markets.  The following is a list of ETF’s we have utilized since their inception and will continue to trade:

  • DIA (SPDR Dow Jones Industrial Average ETF)

  • SPY (SPDR S&P 500 ETF Trust) 

  • QQQ (PowerShares QQQ Trust)

  • GLD (SPDR Gold Trust)

  • GDX (VanEck Vectors Gold Miners ETF)

  • SLV (iShares Silver Trust)

  • VXX (VIX Volatility Index)

  • USO (United States Oil Fund)

  • UNG (Natural Gas Fund)

  • HYG (High Yield Corporate Bond Fund)

  • TLT (20+ Year Treasury Bond ETF)

  • BTC/GBTC (Grayscale Bitcoin Trust)

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Options: Options occasionally comprise some of our preferred trading strategies.

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***We do not follow, trade, or recommend penny stocks or speculative thinly traded stocks.   

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©2020 Hedge Fund Z

Disclosures

 

 

 

 

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Important Disclosures: Investing in the financial markets can involve considerable risk, including loss of principal. Past performance is not necessarily an indication of future performance.  Actual clients may achieve results materially different from the results portrayed.  All material is for informational and educational purposes only and is not investment advice and is not meant to suggest that any securities are suitable investments for any particular investor.  All information reflects our own actions, beliefs, and processes for purely informational purposes. HEDGE FUND Z LLC IS A FINANCIAL BLOG FOR THE SOLE PURPOSE OF EDUCATION.  HFZ does not represent themselves as acting in the position of an investment advisor or investment manager for funds that are not under their direct control and fiduciary responsibility. 

 

Third party quotes and information may not be representative of the experience of HFZ customers and do not represent a guarantee of future performance or success. Many of the results displayed on our website were achieved using leverage, such as 2x or 3x leveraged ETF's or equity options 

 

The information included at HFZ and HFZ writing, research, and updates is prepared for educational purposes and is not a solicitation, or an offer to buy or sell any security or use any particular system.  Information is based on historical research using data believed to be reliable, but there is no guarantee as to its accuracy. HFZ does not represent themselves as acting in the position of an investment adviser or investment manager for funds that are not under their direct control and fiduciary responsibility. HFZ will not provide you with personally tailored advice concerning the nature, potential, value or suitability of any particular security, portfolio or securities, transaction, investment strategy or other matter.  

 

No information, nor any opinion expressed on the Site or in the Services, shall constitute a solicitation or an offer to buy or sell any securities mentioned therein.  The information presented on the Site and in the Services has been prepared without regard to any particular investor's investment objectives, financial situation, needs, capacity, and trading ability or experience. Accordingly, you should not act on any information on the Site or in the Services without obtaining specific advice from your financial advisors and should not rely on information herein as the basis for your trading and/or investment decisions.  HFZ cannot claim or represent that any of our Services are suitable for you. 

 

By your use of the Site and Services, you're agreeing that you bear responsibility for your own investment research, trades, and investment decisions. Only you can decide whether or not a trade is right for you and you agree to be liable for any trades you initiate at your brokerage using research and/or tools that we provide. If you ignore our advice to do independent research and choose instead to trade solely on information, analysis, alerts or opinions found in our Service or website, you have made a conscious, willing, free, and personal decision to do so. You also agree that HFZ, its directors, its employees, subsidiaries, affiliates, and its agents will not be liable for any investment decision, trade made or action taken by you and others based on news, information, opinion, or any other material published through our Site and Services.  

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For additional important risks, disclosures, and information, please visit www.hedgefund-z.com/terms-and-conditions.

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