Conservative investors are not the types for taking risks. A stable portfolio and keeping their capital safe are their main priorities. Conservators are usually trying to obtain investment profits (inflation considered) which are low and in some periods even negative in exchange for the lowered risk to lose their main capital and high liquidity.
A typical portfolio for this profile is strongly oriented towards the monetary investments as well as investments with fixed income.
The main strategy used by such investors is purchsing the most reliable assets for a long term, most notably stocks and obligations of stable companies.
A suitable investment horizon for conservators would be 2 to 20 years. High stability in this case is provided specifically by the long term perspective. The risk is directly dependent on the term of investment and gets lower with long terms.
The best example of a conservative investor would be Warren Buffett. Buffett always invests long-term, because he is certain that it is impossible to get maximal profit from owning stocks over two-three years.
“If you use calculations, you would not neccessarily reach peaks, but it would keep you from descending into madness” - Warren Buffett
Algorithmic strategies used by the fund are optimal for conservative investors. They are built upon the long-term vision of the market movements and oriented towards the risk minimizing and income stability.
Risk management strategies remove the possibility to suffer losses over the planned amount and allow you to gain profit even if successful deals constitute only 30% of your total amount.
High frequency trading strategies are aimed towards opening and closing short-term positions with large volumes in order to obtain minor profit out of each deal. In the core of these strategies lies the principle of market inefficiency — formation of short-term difference in prices of correlating financial instruments; the HFT trader job in this case is to detect and exploit this difference as fast as possible.
Trend-following strategies are based upon the principle of trend detection from time series of instrument cost values via various technical analysis indicators and, consequently, purchasing or selling the instrument when required signals appear.
We also use the risk hedging with option contracts, which helps in smoothing possible drawbacks when market trend changes course.
The algorithmization of trading processes removes the human factor and increases the speed of our reaction in any situations, which also helps with safety. Our algorithms undergo constant meticulous testing and adjusting.