Adapt to Market Movements
What distinguishes Availeth’s system is the ability to adapt to the price movement of markets. As many try to predict what will be the impact of changes such as government stimulus, sovereign debt, currency wars, climate change, the emergence of China. etc, at Availeth Capital, we adapt by following the trends in price movement. We believe it is difficult, if not impossible, to predict what the impact of these combined changes will be. Based on this, our goal is to follow price trends created by very large investors as they buy and sell markets. Over time, this large scale buying and selling creates price trends either up or down.
Why a Systematic/Mechanical Approach?
Even though Availeth does not attempt to predict market prices, we can take advantage of long-term movements by having an edge. Our edge, otherwise stated as getting the odds on our side, is a comprehensive system designed to manage risk, provide diversification and let winning trades run while cutting losing trades quickly. Availeth also prefers a systematic approach to eliminate the role of emotion in trading. In trading/investing, most people lose money due to not being able to control their emotions. By following a systematic approach, an approach based on pre-determined rules, Availeth knows what actions will be taken before the market opens and executes these rules with discipline. Our focus is on managing risk (the possibility of loss), and letting the gains grow resulting in a system designed to produce long-term above average performance in up and down markets.
Markets are markets. All markets, whether it is IBM stock, soybeans, gold, or the Japanese Yen, have one thing in common, a price. When it’s all said and done, one can say that we trade prices, or numbers. And the portfolio of futures markets we track consists of equity indices, agriculture, metals, energies, interest rates and currencies.
The markets we track in our portfolio generally behave in different, non-correlated ways. For example, interest rates are not tied to the price of corn. This non-correlation within our system and with the stock and bond markets, provides valuable diversification for client portfolios. We have conducted in depth analysis of correlation for various stock indexes and have found a high-tendency for these markets to move up and down together thus increasing risk to client portfolios. And industry analysis over many years demonstrates the value of adding managed futures to client portfolios to reduce volatility and improve overall returns.
We are agnostic with respect to market direction, meaning we do not swear allegiance to bull or bear markets. Our ability to trade both long and short ensures we don’t hold positions that deteriorate in bear markets.
When initiating a position, Availeth Capital applies a constant percentage of a client’s assets. This approach automatically reduces the size of each trade in periods of drawdown and increases the size of each trade in periods of rising client account values. And in cases when market volatility is especially high, this may mean initiating a position is too risky and is passed over.