Transcript
Welcome back everybody for another deep dive. This time, um, we’re looking into logical invest. Okay. A platform all about what they call logical rules based investing. Interesting. Yeah. So we’ve got a bunch of stuff to work through. Their website, of course. Yeah. There’s some forum discussions we found, and then they’ve got a whole series of YouTube tutorials about their backtesting software.
Yeah. Quant Trader. Cool. It’s pretty interesting stuff. It’s quite a bit to unpack, but, uh, should be fun. Yeah. It seems like Logical Invest is trying to hit two different types of people, you know, people new to investing, and people who are just, you Just too busy, you know, too busy for all the day to day of picking stocks and watching the market and everything.
Yeah, they really push that, that set it and forget it style on their about us page. Like all their main points are quantitative research, making it understandable, keeping it adaptable, and being cost effective. I mean, it’s good. Yeah. And even like low cost EPFs, they talk about how they use those as part of their strategies.
Yeah. You know, what I found really interesting was their team, their background is all over the place. Yeah. Like image processing algorithms and financial modeling, cybersecurity even. It’s not like your typical Wall Street types, you know? Makes me think they’ve got a really different way of looking at investment strategy.
Okay, so let’s get to this QuantTrader thing. Sure. It’s their back testing software. It’s got a free and paid version. Okay. And it lets you build your own strategies and test them out. Oh. It’s pretty amazing from what I’ve seen so far. Yeah, especially for, you know, you. You like to dig in and learn things.
Right. QuantTrader is super user friendly, too. You don’t have to be a coder to use it. And the tutorials show you how to pull in data from like Yahoo Finance and Tiengo, Google Finance, all that stuff. They even have synthetic ETFs you can create. To like try out different what if scenarios. Okay. It’s pretty neat.
Yeah, and it gives you, you can really go deep into it, like want to change look back periods. Yeah. Easy. You can adjust for volatility. It even has risk management stuff built in, like volatility limits, hedging strategies. You can really push the limits of a strategy and see what it can do. Yeah, I was really interested in how you can take multiple strategies.
And kind of mash them together. Yeah. They call them meta strategies. Hmm. Or custom portfolios. They actually show you how to make one. Oh, cool. Like a hedge Dow Jones strategy. Oh, nice. It’s one of the tutorials. That’s a really good way to show how to balance risk and a reward. Yeah. Like first, they pick the four best performing Dow Jones stocks, they do that using QuantTrader of course.
Yeah. And then they build a separate hedge with like gold, 20 year treasuries, even convertible bonds in there. And then they take those two pieces and combine them. To hopefully get better returns and also reduce volatility and drawdown. Yeah, and they say you can tweak both parts, you know. Right. The Dow part and the hedge part to find what works for your own risk level.
Yeah, and they’ve got this heat map thing. Right. To help you actually see the results. It’s a pretty amazing tool. Yeah. It’s a powerful stuff, but it really shows you that you need a community to, you know, logical invest has a really active forum where people can share like their experiences and the strategies they’ve made.
Investing can feel pretty lonely, you know? Yeah, for sure. So that kind of space for sharing ideas is, is really valuable. Yeah, it really seems active. Yeah. Yeah. They’ve got threads on specific strategies, backtesting stuff, even just. Talking about the Logical Invest team’s own investments. Oh, really? Yeah, it’s kind of interesting.
Yeah, it’s like you get to see behind the curtain. Right. And we’re all curious about how the experts handle their own money, right? Oh, yeah, for sure. Speaking of real world stuff. Yeah. Logical Invest really pushes that Quantrader isn’t just a theory thing. You can take the signals it makes and actually trade.
Mm hmm. On platforms like interactive brokers. Oh, cool. They even have a separate tutorial for how to use the Interactive Brokers portfolio rebalance tool. Oh. Which is pretty cool if you can use this stuff with real money. Yeah, that’s handy. And it’s not just Quantrader either. They have a whole ETF portfolio library on their website with pre built portfolios for different risk levels and return goals.
That is great. Yeah. They even have one that’s designed for a maximum drawdown of just 80%. 7%. Wow. That’s really risk averse. Yeah. But I guess that shows how they’re trying to reach lots of different investors. Yeah. And they give you all the performance numbers, too, like the compound, annual growth rate, volatility, Sharpe ratio, and that max drawdown we were just talking about.
And they have this really cool feature. You can change the amount of different assets. Oh, cool. In a portfolio. And you can see how that affects the whole performance. That’s a good way to get a feel for diversification and asset allocation. Yeah, for sure. And speaking of options, they have different pricing tiers.
Oh. Yeah. So they have a free account. That lets you try out some basic tools and signals for their free strategies. And then, they have like QuantTrader Lite and QuantTrader Pro subscriptions. Oh, I see. And Pro unlocks everything in the software. Okay. And then, if you want to go all in. Yeah. They have professional and institutional subscriptions.
Wow. Starting at 250 a month. And those give you access to all their research, all the tools, and they give you extra support too. So they’re really trying to reach individual investors, financial advisors, and institutions. Basically everyone. It’s a one stop shop for logical, rules based investing, no matter how much you know.
Exactly. And they do offer support too. Forum and priority email support for all paid subscribers. People have been talking about the forum a bunch. Yeah. But it’s, it’s clear that it’s really helpful for their users. Like you can learn from what other people have done well, avoid the common mistakes. Yeah.
You might even get ideas for new strategies. It’s like having a bunch of mentors and peers all there to help you reach your investing goals, you know. Yeah, that’s a good way to put it. But it also brings up a problem with, with any rules based system. You can become too reliant on historical data. Right.
There are a bunch of threads in there where people are talking about how to change their strategies. Yeah. To keep up with how the markets change. That makes sense. Like, uh, rising interest rates. Yeah. That could really affect bond heavy portfolios. Right. It reminds you that the future isn’t always like the past.
Yeah, even the best software can’t predict everything. Right. Markets are complicated and unpredictable, really, but Logical Invest does stress that you need to be able to adapt, you know? Right, right. As part of their approach. Yeah, they really push that you need to keep an eye on things and adjust your strategies if you need to.
Not just, you know, It’s a balancing act between sticking to the plan and being, being flexible enough to react to new information and how the market’s moving. Yeah. And that’s where you as the investor have to step in to think critically, watch how things are doing and adapt. It’s really a partnership between the system and the investor.
That’s a great way to think about it. The forum actually gives you some insight into Logical Invest’s history too. Yeah. Yeah. They’ve been around since at least 2013. Oh, wow. And some of their main strategies have been live traded since then, too. Hmm. That’s a good sign. It is. Shows that they’ve been through different market ups and downs.
Yeah. And their strategies have held up. At least somewhat. But, you know, past performance doesn’t guarantee anything. Exactly. But it does give you some idea of how a strategy might behave when the markets change. They actually list the start date for each of their strategies right on their website. Oh, cool.
So you can see how long each one has been going, like their MYRS, BRS, and GMRS strategies, all going since mid 2013. Wow, that’s impressive. It is. Shows how good their research is, and that they’re really committed to long term performance. Yeah. So, we’ve covered a lot of ground here. Their whole philosophy, QuantTrader, their portfolio library, even that active forum.
Yeah. What are you thinking so far? I gotta say, I am impressed. Yeah? Yeah, they’ve got this sophisticated stuff, but they make it so easy to use like QuantTrader seems really powerful Oh, yeah, but even someone who’s you know, totally new could get the basics and start playing around. Those YouTube tutorials are amazing Yeah, they make it so easy to understand even even something like that hedge Dow Jones strategy, you know, right?
They break it down step by step, but for someone who’s brand new to this whole style of investing Yeah, yeah What do you think would be the toughest thing to get used to I think letting go of emotions You know, we’re so used to reacting to the market using the hot stocks and everything right, right It’s hard to just trust, you know to trust the data.
Yeah the data the system the whole thing And that’s where Logical Invest really shines. They’re so transparent with everything. If you know why a strategy works, how it’s supposed to do in different markets, it’s a lot easier to stick with it. Even when things get crazy. Makes sense. But there are some downsides too.
Oh, of course. To this whole rules based thing. What would you say are the limits of this? No system is perfect, right? Right. No matter how good the back testing is, it can’t see the future. Black Swan events? Big economic changes. That can mess up even the best strategy? Right. And then, there’s over optimizing.
Like, you could tweak a strategy so that it fits the past perfectly. Yeah. But then in the real world, it doesn’t work. You know? Yeah, that’s a really good point. Yeah. Seems like you still need the human touch, right? For sure. Logical Invest gives you the tools, the framework. But you have to use your own judgment, keep track of how things are doing, and be ready to change things up if you need to.
It’s a team effort, the system, and you, which brings me to a question for you. Okay. If you had a quant trader, and you could build any strategy you wanted, what would you do? What assets would you go for? How would you manage risk? Wow, that is a really interesting question. Right. It makes you think about what you really want to achieve and how you handle risk.
Exactly. Would you go for the high growth tech stocks or maybe dive into emerging markets? Or would you stick with something more stable? Right. Something that generates income. Yeah, and how would you protect yourself when the market drops? Yeah. Yeah. There’s just so many things to think about. It’s amazing.
And that’s what I love about Logical Invest and Quantrader. They give you the power to, to really dig into these questions and then build something that fits you. Exactly. Their goals, how much risk you’re comfortable with, the whole thing. That’s, that’s what it’s all about really. It really shows you what you can do.
Yeah. When you have the right tools and information. Logical Invest is doing something really cool here. Yeah. They’re taking these complicated ideas and they’re making them easy to understand. Mm hmm. So more people can take control of their investments and really use data to make decisions. And it’s not just the tech stuff either.
Right. That forum community is a huge part of it. It’s a place where people can learn together, help each other out. Yeah. And you can just connect with other investors. Right. People who are trying to do the same things as you. It’s like having a built in support group. Yeah. For your whole investing journey.
And uh, speaking of journey. Yeah. Yeah. This deep dive has given us a lot to think about. It has. If you had to sum up like the key takeaways, what would you say are the most important things for our listener to remember? I’d say the big one is the power of this logical rules based investing. It’s about taking your emotions out of it and just Focusing on the data.
Using strategies that have been tested and tweaked for different situations. Exactly, and Logical Invest gives you everything you need to do it, no matter how much experience you have. Whether you’re a total beginner or you’ve been doing this for years, their platform helps you explore all these strategies.
Test out your ideas and hopefully build a portfolio that fits you perfectly. It’s not a one size fits all thing though. Oh definitely not. They get that everyone is different. Right. So they give you all these options from the pre built portfolios to a quant trader where you can make your own custom stuff.
And they’re honest about the downsides too. Oh yeah, for sure. Of rules based investing. Right. They know that backtesting has its limits and you still need to be able to adapt, use your judgment. It’s not just about following the rules blindly. No, not at all. It’s about understanding why they work and then being ready to change them as you go.
It’s always changing. Yeah, it’s a process, not just a one time thing. Exactly. So, going back to what we were talking about before. Yeah. If you could build your own strategy using QuantTrader. Right. What would it be? That’s the big question. What assets would you focus on? Yeah. How would you protect yourself from risk?
It’s a really good exercise to think about that. Yeah. It helps you figure out what you really want. And how you want to approach investing. And if you’re interested in learning more. Yeah. Go check out Logical Invest. Yeah, their website is great. Download QuantTrader, see what the forum is all about. You might find a whole new way to think about the market.