Frequently Asked Questions

I already have a financial advisor. Why do I need your services?

We recommend that you continue to work with your registered investment advisor and have them continue to manage a certain % of your total investable assets.  Financial advisors offer value when it comes to macro-level planning of your assets along with tax, estate and wealth-transfer planning.  However, most financial advisors are not well trained in actively managing money, and are usually slow to exit an investment when it starts to show fatigue or demonstrate valid exit triggers.

Because some financial advisors understand that they are not well trained or experienced in active portfolio management, some will outsource the investment management task to 3rd party investment managers.  This is a positive for the client.  However, the negative is that the client will be paying higher fees because the advisor and 3rd party investment manager will be splitting the fees.

For the financial advisors that manage the assets themselves, they will usually just “buy the market”, which is not optimum for the client. This means that most advisors will allocate your portfolio across a blend of large-cap stocks, large-cap indexes, mid-cap or small-cap indexes, emerging market ETFs, and bond ETFs.  Many times the chart of one of these investments, to the trained eye of an active portfolio manager, will say “don’t enter this ETF until it breaks above a certain level”; or, “get out of this position if it closes below this level”.  Also, macro-level timing indicators might be flashing “yellow” telling the trained portfolio manager to start reducing exposure by trimming some positions.  Unfortunately, most financial advisors don’t understand this and will still put you into these investments regardless of what the charts or macro-level timing indicators are telling the trained portfolio manager. Moreover, financial advisors will be slow to get you out of an investment, if ever, when they should be selling and going to cash. Because most financial advisors are not trained portfolio managers and don’t have strong technical skills, they will be slow to react to any sell signs that a stock, index or ETF may be exhibiting.

Finally, financial advisors will usually want to hold your portfolio of broad market indexes and ETFs right through the next recession.  They will just say “let’s hold on as the market will eventually come back”.  We know how this played out in 2008 when most portfolios lost 50% or more of their value.

Overall, it’s recommended to keep a certain % of assets with a financial advisor to take advantage of the macro-level asset, tax, estate and wealth-transfer planning services that they offer. Additionally, it’s recommended to keep a certain % in cash or gold; and then allocate a portion of your assets to active strategies run by experienced portfolio managers.  Because we are active managers that are expert technicians, who also monitor macro-level market-timing indicators, we know when certain investments are flashing “yellow” or “red”, and we know how to get out of positions quickly when sell-signals are triggered, which is key to capital preservation.

What type of analysis does your firm do to drive your strategies and convictions?

We do a robust analysis each week to help guide our investment thesis and trading.

At a macro-level, which helps us modulate our bullish and bearish exposure levels, we analyze approximately 80 charts weekly that represent macro-level technical, fundamental, breadth and sentiment data. We publish our weekly analysis every Sunday evening.

At the micro-level, which identifies prospective stocks, we analyze hundreds of charts weekly of individual stocks and ETFs, and combine this technical information with fundamental and quantitative analysis. We’ve developed a proprietary 4-level scanner that leverages technical, fundamental and factor-based quantitative analysis to identify prospective stocks to buy or short, and to provide entry and exit triggers.

To view an intro video that discusses the analysis that we perform and our 4-level scanner please go here.
For more information on the analysis that we perform please go to Education -> Learning Center Macro & Technical Analysis
To see our weekly market analysis please go here.



My financial advisor never pushed me to get out of stocks during the last downturn and I lost a lot of money. Are your portfolio managers different and more nimble?

Our portfolio managers are trained to be fast moving and to get out of positions quickly when our exit rules are triggered.  We are trained as traders, so we  follow entry and exit rules for all holdings and we follow these rules in strict form.  If a market starts to become unhealthy, we will usually see it a week or two in advance through our stock holdings, and our rules will trigger us to close positions in incremental fashion.  If a chart starts to look unhealthy we’ll know it, because we are expert technicians, and most likely we’ll be out of that holding before our loss gets much greater than 5%.  We also monitor the macros of the US economy (major indexes, bonds, economic data, breadth) along with Europe and Asia, which provides us visibility into “storms” developing, where we are quick to reduce exposure until the storm dissipates.  With this said, taking losses is part of the business;  the key is to keep the losses small and to protect our capital by following strict exit rules and by modulating our exposure levels from week to week.

On the contrary, financial advisors are not trained like active portfolio managers or market technicians, and they move slowly. When the market gets volatile, or if a position starts to roll over, they will usually just say, “let’s hold on because the market (or stock) will eventually come back”.  Unfortunately, we know what happened in 2008 where most portfolios where cut in half, and some were down as much as 70%.  With this said, we believe that you should continue to work with your financial advisor, if you already have one, as they can offer you many services, but we don’t recommend to have them manage much more than 30% of your total investable assets.

What differentiates QTR strategies to other managed investment products?

Below is a summary of how we are different:

1) Our strategies blend technical, fundamental and factor-based quantitative analysis that is implemented through a sophisticated, proprietary 4-level scanner.
2) Most of our strategies are long/short where we allocate a certain percent of the portfolio to short hedged trades.
3) We modulate our bullish and bearish exposure levels through robust, macro-level technical, fundamental and sentiment analysis.
4) We follow strict exit rules that will quickly get us out of positions when our exit rules trigger.  This allows us to lock-in most gains while protecting capital.

What is factor-based quantitative analysis?

Factor-based, quantitative predictive analysis (QA) is a technique that seeks to understand and predict behavior by using mathematical and statistical modeling.  In the investment management industry, QA is used to analyze investment opportunities to provide predictions of when to purchase or sell securities, and the potential magnitude of a move.  The input factors, or independent variables, that are fed into a quantitative model include financial ratios such as price-earnings ratio (P/E), earnings growth, revenue growth, cash flow, among others.


I just buy the S&P500 index ETF (SPY) and other ETFs and have done well. Why should I start moving cash into actively managed strategies?

When the market is in a confirmed, long-term UP trend it’s okay to allocate a certain % of one’s portfolio to an ETF like the SPY that tracks the S&P500 index. However, it’s strongly encouraged to have a good understanding of technical analysis to help you set exit levels to protect your capital; especially since the major indexes are looking less healthy as of late Nov 2018.

As we head into 2019 the market is going to become more difficult to navigate as the Federal Reserve continues to raise interest rates, and fiscal stimulus from the corporate tax cuts begin to wear off.  The Fed’s interest rate hikes will most likely slow the US economy to sub 2% growth by late 2019.  There is a moderate to high probability that the US economy will go into a recession in 2020, which will cut most portfolios by 40% to 50%.  Be aware that the stock market is forward looking so stocks will start to have a higher frequency of volatile trading and strong corrections up to 9 months prior to a recession, so portfolios can get hurt many months prior to the start of the actual recession.

As we head into 2019 where the Fed continues to raise interest rates, it will be less optimum to “buy the market” by holding broad indexes and ETFs and better to focus on specific stocks within specific industries. That is, stock picking and nimble long/short strategies will most likely outperform the broad markets in 2019.  Moreover, strict exit rules are required to control downside risk and for capital preservation.  It’s never recommended to “just hold on because we think it’s going to come back”.  We know what happened in 2008 where most accounts lost 50% of their value.  Having strict exit rules and an understanding of where and how to execute the exits is imperative to locking in gains and preserving capital.

As a general rule for the investment management industry, most investment advisors are not traders, they are not trained to be nimble and fast moving, they don’t obey or really understand the concept of having strict exit rules, and most will tell you to “just hold on because it will eventually come back”.  As of late 2018 the market is becoming a lot more volatile and “just holding on” is not a good game plan.

As of November 2018 it’s still okay to allocate a small % of one’s total investable cash to a broad-based index ETF like the SPY, because the stock market is still in a confirmed, long-term up-trend. However, the market is becoming more volatile and the indexes are not looking healthy.  It’s imperative to have an exit strategy for all holdings based on predetermined levels.  If you are not sure what these levels are please contact us and we can help you set exit rules for your current holdings. It’s also recommended to start reducing your holdings of passive indexes and ETFs and to either go to cash, or allocate some assets to actively managed long/short strategies that are managed by a nimble portfolio manager.  Portfolio managers within QTR Capital follow strict exit rules, are quick to move to cash when the technicals trigger exits, and dynamically allocate more to bearish trades when the charts and indicators warrant it.

What is the premise behind the sector rotation strategy?

Large hedge funds and automated investment bots continuously rotate large amounts of money across different industry sectors.  Typical sectors include industrials, energy, technology, health care, consumer staples, consumer discretionary, and transportation.  There are approximately 60 sectors that are significant.  There are actually 200 total sectors when looking at a detailed map of all sectors. When cash starts to flow into a sector, e.g. semiconductor companies, it will push up the stocks in this sector.  As cash is rotated in, stocks within the sector will trend upward typically for 3 to 6 weeks, and sometimes for many months. However, once these large funds decide to book profits and rotate into another sector, the stocks and ETFs will quickly drop.

The Sector Rotation strategy takes advantage of this phenomenon of cash flowing from sector to sector, and follows the money.

What is unique about the Contrarian strategy?

The Contrarian Fund identifies stocks that have been out of favor for the last 6 to 18 months, and sometimes longer.  Most of these companies have spent up to two years addressing their internal issues, such as reorganizing management, eliminating poorly performing products, introducing new and more competitive products and cutting their cost structure.  Once these companies start to demonstrate to investors that they have “righted the ship” and that they are able to grow revenue and earnings again, the stock will bottom-out and start to recover.  Moreover, many times these recovering stocks will hold solidly above past support levels, even during times of increased market volatility.

When a strategy is Long/Short what does this mean?

A long/short strategy simultaneously opens bullish and bearish trades.  Sometimes this type of strategy is called a market neutral strategy since it can make money in both directions.

What brokers do you work with?

We manage individually managed accounts through TDAmeritrade.