GSTCAP

Putting the Odds in Your Favor

GSTCAP is a new type of company in the asset management industry.  We do not manage money, provide exhaustive research reports or indices.  We are investment theorists and coders that strive to add value developing algorithms that make capital allocation recommendations to improve investment outcomes. Our motivation is simple:  provide probabilistic data that investment practitioners can use to generate positive active returns over a market cycle without using leverage or shorting securities. 

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Our ReferencePoint algorithms are return harvesting tools investors can use to make asset allocation decisions.  They provide capital allocation recommendations coded to own investment assets when the probability of earning positive returns is high and removing exposure when the probability is low.  ReferencePoint algorithms currently produce exposure coefficents for over 25 high quality liquid ETFs that represent important sources of risk premium. ReferencePoint coefficients range from 0 to 1. We deliver them each day at 3:30 EST.

Processes Focused In Three Areas

You Should Care About Market Integration

Market risk is greater today than in the past. Risk diffuses across markets with greater efficiency as the world’s supply chains are more integrated. This is evidenced by global equity market correlations which are nearly 1. This secular shift means that what happens in China, for example, impacts U.S. markets more intensely than in the past. It also means that diversification is less effective. Equally important is the impact capitalization weighted ETFs have on market risk. The combination of liquidity and asset concentration can increase drawdown in times of stress and elevate prices beyond valuation norms in times of optimism.

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This all means that market, sector and industry direction impacts portfolio returns to a larger degree than in the past and investors must focus more attention on it to add value. GSTCAP can help.