Stock Market Prediction: Low-Risk Strategy

I Know First Research Team LogoThis article “Stock market prediction: Low Risk Strategy” was written by the I Know First Research Team.

Stock Market Prediction: I Know First provides investment solutions for both individual and institutional investors, utilizing an advanced AI self-learning algorithm to gain a competitive advantage. We offer a personalized approach to our institutional clients, assisting them in their investment process based on their specific needs and preferences. For more details about I Know First solutions for institutional investors, please visit our website.

Stock Market Prediction: Low-Risk Strategy

The following trading strategy was developed using I Know First’s AI Algorithm daily forecasts from January 21st, 2020, to June 26th, 2023, with a focus on S&P 500 stocks selected based on the signal and predictable filters. This strategy is available to our institutional clients: hedge funds, banks, and investment houses, as a tier 2 service on top of tier 1 (the daily forecast).

The strategy involves constructing a tier-weighted portfolio with monthly rebalancing, achieved through the implementation of predictable and signal filters. Additionally, we utilize a signal outlier filter to ensure that stocks with signals outside of the selected range, i.e., those exhibiting extreme values, are not included.

The strategy provides a positive return of 90.62% which exceeded the S&P 500 return by 58.82%. Below we can notice the strategy behavior for each year.

The primary feature of this strategy is risk minimization based on drawdown. Below, we can observe the strategy alongside the drawdowns of the S&P 500 for the analysis periods.

The IKF strategy experienced significantly fewer drawdowns than the S&P 500 across all periods, making it an excellent choice for low-risk investors.


I Know First offers investment solutions for institutional investors, leveraging our advanced self-learning algorithm to gain a competitive advantage. We provide a personalized approach for our institutional clients, enhancing their investment process according to their specific needs and preferences. In this context, we have evaluated the performance of the low-risk strategy based on AI from January 21st, 2020, to June 26th, 2023.

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Please note-for trading decisions use the most recent forecast.