Most risk metrics only look at how much a price bounces around, but they don't tell you how a client feels when their portfolio is in the red. In this post, we introduce the Ulcer Index—a new tool on our iQUANT Factcards and Portfolio Finder that measures financial stress by looking at both the depth and the duration of market drops.

Learn why this "misery meter" is a better alternative to Max Drawdown, how it works alongside our worst-case CAGR ranges, and why it is the key to helping your clients stay the course during volatile markets.

We all look at the leaderboard. It’s natural to want the winner. But chasing the highest number is often a strategic error that we call the "CAGR Trap." You end up forcing a volatile strategy into a conservative slot just because the backtest looked pretty. That’s not risk management; that’s setting yourself up for a difficult conversation. When the market rotates, the tracking error will cost you more in client trust than you ever gained in extra returns.

Too often, investment professionals judge a portfolio by its individual parts rather than its overall construction. But just like raw eggs and flour aren't appetizing on their own, no one ingredient defines the quality of the cake. A hedge asset isn't supposed to outperform—it’s meant to protect when stocks falter. Ignoring its role because it underperforms in bull markets misses the point entirely. Smart portfolio management is about how the components work together, not how they perform in isolation.

More advisors are using term-maturity bond ETFs instead of individual bonds to build simple, efficient bond ladders. This guide breaks down the key differences, helping you weigh diversification, control, cost, and convenience—so you can choose the right fit for your fixed-income strategy.

In 2022, many bond funds fell 10–15%—and that includes dividends. Strip out the dividends, and the loss on principal alone was often closer to 15–20%. Unlike individual bonds, which mature at par and provide a clear end date, bond funds offer no such certainty. Their NAV fluctuates daily, with no guarantee of recovery by any specific time. That’s the critical difference: NAV is not a maturity date—and that matters when your client needs their money back - or need reassurance.

Many advisors still rely on style boxes to build portfolios—large-cap value here, small-cap growth there—because it looks diversified and feels structured. But that’s a shortcut, not strategy. Modern Portfolio Theory was never about categories; it was about correlations. Harry Markowitz taught us to build portfolios that work together, not just look balanced. Today, with tools like optimizers, we can actually do that—create allocations based on how assets behave, not where they sit in a grid.

Understanding both beta and correlation is crucial for building successful investment portfolios, as these metrics reveal how an investment reacts to changes in the market. While beta measures how much an investment’s returns swing compared to the overall market, correlation shows how closely an investment’s movements follow the market’s direction. Two investments might have the same beta or correlation, but their performance during market downturns can be very different. That’s why it’s important for advisors to analyze these numbers in both rising and falling markets, rather than relying on simple top-line numbers. By looking at how beta and correlation shift in different conditions, advisors can identify strategies that offer growth in strong markets and better protection when times get tough, helping them make better decisions for their clients.

Building a portfolio with an optimizer takes minutes—and the results often look great on paper. But the real challenge is understanding how that portfolio is likely to behave over time, based on historical data.

Advisors must be able to explain an investment’s “personality” so clients know what to expect in both good markets and bad. A major part of that is volatility risk, commonly shown through standard deviation. But standard deviation only tells part of the story. To fully understand volatility risk, you also need skew and kurtosis. They reveal how returns behave in extreme markets—not just how much they move, but which way, and how often.

In investing, feelings often lead us in the wrong direction. Greed makes people buy at the top, fear drives them to sell at the bottom, and comfort keeps portfolios stuck in place. That’s why iQUANT.pro follows a belief called Investment Objectivism — the idea that logic, not emotion, should guide every decision. Using a rules-based, data-driven approach, iQUANT filters out the noise and focuses on what’s real. When the market crashed in 2020, many investors panicked and sold, only to miss the rebound. Others chased hype stocks in 2021 and paid the price. These aren’t one-offs — they’re patterns. iQUANT’s discipline-based models aim to avoid those traps and have consistently delivered benchmark-appropriate alpha over time, because in the markets — just like in math — the truth doesn’t bend to feelings.

iQUANT pre-built portfolios use historical standard deviation as the primary risk measure instead of maximum drawdown or returns due to its higher repeatability. Standard deviation has a 0.9 correlation with future volatility, while maximum drawdown has 0.5 correlation with downside risk. Historical standard deviation explains 85% of future volatility, compared to less than 50% for return-based measures.

Portfolios are Traditional or Dynamic. Traditional portfolios have fixed stock-bond allocations, while Dynamic portfolios adjust based on targeted risk levels. Advisors choose between Target Risk portfolios, which maintain specific risk levels, and S&P 500 Directional portfolios, which track market movements.

Using data-driven models, iQUANT helps advisors manage risk with a time-tested and justified investment process.

Tired of chasing returns like a dog chasing its tail? Every year, the same pattern repeats—models get abandoned, strategies get swapped, and investors end up buying high and selling low (again). If market timing worked, we’d all be billionaires by now. But instead, the data keeps proving one thing: sticking to a well-constructed allocation beats emotional decision-making every time.

Yet we’ve witnessed advisors jump ship on solid strategies like the Recession 10 model in 2023 or International Titans last year, only to miss out on double-digit gains. So, if you’re looking for a surefire way to underperform, keep switching strategies. Otherwise, stick around—we’re about to break down why staying the course is the only real winning play.

Over the past decade, U.S. stocks have led the market, but history proves that international stocks—both in developed markets like Europe and Japan and emerging markets like China and India—have also had their moments of outperformance. The key question now: Are international stocks poised to take the lead again?

If your investment portfolio isn't mirroring the S&P 500's performance, it may be because your portfolio includes investments beyond domestic mega-cap stocks. The S&P 500 is a market-cap weighted index dominated by large tech companies, so comparing your portfolio to this index may not be realistic. To closely track the S&P 500, consider a portfolio composed only of domestic large-cap stocks. However, for long-term efficiency, a diversified portfolio may be a better choice, even if it doesn't always align with the S&P 500's short-term performance.

As an investment advisor, it’s your job to understand how a strategy works and ensure your clients do too. Focusing solely on growth can lead to confusion if an investment behaves differently from market expectations. By considering metrics like capture ratios, betas, and correlations, you can manage expectations, avoid surprises, and build trust, ensuring investments align with your clients’ financial goals.

With rising prices continuing to put pressure on both businesses and consumers, the new administration is leaning on a "drill, baby, drill" approach to boost oil production and ease economic strain. History, like the oil crisis of the 1970s, reminds us that supply-side solutions alone aren’t enough—they need to work alongside broader strategies. Today’s combination of high demand, tight supply, and soaring interest rates highlights the need for smart, focused energy policies to help stabilize costs and support growth.

High returns can be exciting, but they don’t always mean an investment moves in step with the broader stock market. Taking the time to evaluate correlations helps you understand how an asset behaves in different market conditions. This insight is key to setting realistic expectations and building trust with your clients by ensuring they’re fully informed about the risks and potential outcomes.

For many, investing in the stock market means making educated guesses about an inherently uncertain future. Despite this unpredictability, certain economic indicators have consistently helped identify potential market trends. By analyzing their timing, patterns, and critical levels, advisors can gain valuable insights into market behavior. In this blog, we discuss five indicators that have stood the test of time.

Rebalancing plays a crucial role in portfolio management, helping keep investments aligned with your clients' objectives and risk preferences. While many advisors rely on strategies like time-based or threshold rebalancing, there’s a powerful alternative to explore: combining time-based rebalancing with percentage-based upper and lower allocation limits. This method brings added structure, flexibility, and discipline to portfolio management, all while minimizing unnecessary trades.

Market downturns can be unsettling, but they also offer a chance to reinforce smart investing habits. Advisors are instrumental in guiding retail investors toward strategies that withstand volatility and reduce losses. Mistakes like panic-selling, fleeing to cash, or holding onto poor investments can derail long-term goals. The iQUANT Portfolio Optimizer helps advisors create diversified, low-correlated portfolios that reduce risk, stabilize returns, and encourage discipline.

As Bitcoin continues to gain traction, investment advisors are increasingly exploring its role in traditional investment portfolios. Known for its high volatility, Bitcoin’s moderate-to-low correlations with stocks, bonds, and gold make it an appealing tool for diversification. By understanding Bitcoin’s unique performance metrics—like its capture ratios and distinct correlation levels—advisors can strategically balance portfolios to include growth potential without overloading on risk.