Direct Indexes

Manage
1

Direct indexes seem to be the next big thing personal finance. For those that don’t know, this allows investors to directly buy the stocks of an index instead of purchasing an index mutual fund or ETF. Also apparently, some brokerages are allowing you to build your own index. For example a value investor might tilt a custome SP500 index more towards value and out of high growth/low value. All the major brokerages and financial firms are buying up their versions of it. Franklin Templeton just acquired O’Shaughnessy Asset Managent for their new direct index platform tool Canvas. Vanguard aquired Just Invest. . Blackrock bought Aperio. I’m kinda fuzzy on what that means for the average personal investor who manages their own investments and how that would tie into P123. Thinking out loud, do you think we are coming to a da day when I can created my own personal index by exporting 100 stocks out of a personal P123 screen, feed the 100 stock list into my Fidelity/Schwab portal and it would allocated and disperse my money among the 100 stocks, either through cap weight or equal weight? Every paycheck you could have your money direct deposited directly into your account and it would disperse into your custom index.

https://www.cnbc.com/2021/08/10/direct-indexing-is-the-hot-new-investing-strategy.html

2

Our platform can easily support direct indexes. Just as an example, here’s a simulation that tilts the NASDAQ 100 towards value stocks. https://www.portfolio123.com/port_summary.jsp?portid=1659700 You could save it as a live strategy, and it would give you quarterly signals; you can easily create a Manage account that follows the strategy and automate it by linking it to your IB or Tradier account. There are many other options, and I’d be happy to help you create one that suits your needs.

3

I use certain trading systems of mine as an index in order to see how healthy the market is.
Key concept: lets say you look at XLE. There is a ton of junk in the index and big caps.

Now build a system based on a decent ranking (lets say value and momentum) system and limit via a buy rule to energy stocks and limit
to small caps.

→ now you have an index that shows you how energy stocks behave. BUT only the strongest ones and small caps.
When this index prints a higher low and XLE prints a double botten, you know there is strength under the hood.

Very powerfull!