As business owners, we know how important it is to make informed decisions. Sometimes, thanks to technology, that’s easy to do. Other times, not so much. For instance, investing in stocks can be challenging. But John Duffy, a Vietnam vet, is out to change that.
Duffy, who learned about computing before consumers could ever buy one, just launched Trending Stocks, aimed at helping DIY investors.
After leaving the Navy, Duffy was recruited to join IBM because he was one of a handful of people who could program computers who weren’t already IBM employees. With his background in economics and software development, Duffy created Trending Stocks, which he says is the only technology to have fully automated the Trend Following Strategy.
I talked to Duffy (via email) about his innovative new concept.
What gave you the idea for Trending Stocks?
John Duffy: After two huge downturns in the stock market, one in 2000 (down 50+%) and the other in 2008 (down 56+%), it took approximately 14 years to get back to “even”. Losing 14 years of investing time and money was the impetus to research a better way to invest.
Studying the book, The Complete TurtleTrader (2007) introduced us to the Trend Following Strategy. It was a real eye-opener, and I searched for software to help me identify trending stocks, including calling the author, Michael Covel, who was unaware of any software that did that.
Since I have a software development background, I decided to write the software myself. After years of design, development, testing, and retesting, TrendingStocks.IO is the outcome.
The Trend Following Strategy focuses on Risk Management, which is a big part of the Trending Stocks platform. Not everyone utilizes a Trend Following Strategy (though we think they should for a portion of their investing dollars), so we designed the platform to make it useful to any investor regardless of which investing strategy they use.
Risk Management helps you not ride the market or a stock down, and Trending Stocks helps you find those trending stocks in every sector and at any price point.
How many years were you working on it?
Duffy: Over 10 years.
Phase 1 included an in-depth study of the Trend Following Strategy and principles, the development of a methodology to identify trending stocks, and then a process to quantify the trends to determine the best ones.
Phase 2 included translating the methodology into software. The first development was a CD-PC- based solution.
Phase 3 included testing the overall approach and numerous re-tests to ensure it functioned correctly under all possible market conditions.
Phase 4 included extensive back testing to determine that the algorithms actually identified good investable trends.
Phase 5 involved rewriting the PC-based solution to a web-based solution that would scale.
Currently, I continue to re-test and continually update the software modules.
Is Trending Stocks aimed at Day Traders or investors with longer-term goals?
Duffy: This is definitely not a day-trading solution. It provides an analysis at the end of every business day and is unsuitable for day trading.
It is aimed at long-term investors like us. It was developed with two goals in mind. First, to help the individual, do-it-yourself (DIY) investor manage the risk associated with investing, and second, to grow their wealth.
Once the individual has confidence that they are working with good investable trends and a solid risk management process, it is an easy plan to follow.
Are you targeting a specific demographic? For instance, I recently read that Gen Z is seeking financial advice.
Duffy: Charles Schwab came up with a new demographic called Generation Investor (Gen I), which cuts across all age groups as more and more people strive to take better control of their money and investments. They want to learn more and be involved in the decision-making process.
With the website and the platform, we are striving to serve those people. Our tools will help investors across all demographics learn to select stocks and manage risk.
What’s the cost?
Duffy: $19.99 a month is the current special pricing for our launch. In the near future, we will be sunsetting that price and offering tiered pricing for an annual option. There will be special pricing when we add foreign exchanges to the platform.
In addition, we provide a 4-week free trial, no credit card required—the longest in the industry so that investors have lots of time to get comfortable with the platform and determine if it is right for them.
How does it work? Do you give stock recommendations?
Duffy: We do not provide “recommendations.” We do something far better—we give investors the information they need so they can learn to make their own decisions and help answer the common questions they have, such as:
- What to buy (which sectors are high performing, which stocks in those sectors are trending, how are they rated, etc.)
- How much to buy (determined by the size of the portfolio, number of stocks, etc., as well as multiple risk measures)
- How to manage risk (based on your personal risk tolerance, the stock’s volatility, calculation of stop loss, and other risk factors)
- Identifying every trending stock along with the calculation of its trend strength to help take the guesswork out of deciding which trend is best.
We calculate a prudent stop-loss position for every stock (trending or not) to help reduce the emotion of investing. And we provide a trade risk calculator which can be used to determine the exact number of shares to consider to stay within your personal risk tolerance.
Every day, Trending Stocks analyzes thousands of stocks and provides reports on every stock that’s trending.
After examining the advice from Trending Stocks, how can investors buy stocks?
Duffy: We are not a broker/dealer and cannot execute trades. An investor buys stocks through their own broker like Schwab, TD Ameritrade, Fidelity, etc. Most brokers provide low- or no-cost online accounts.
What are your goals for Trending Stocks?
Duffy: To help as many people as possible learn to invest and implement risk management processes in order to grow wealth and protect their profits from market downturns.
To be a trusted resource for individual DIY investors, regardless of demographic.
Achieve 1 million members who, through Trending Stocks, are economically secure and confident of their financial futures.
Because inflation, regardless of the rate, is a factor that must be considered, an investor’s return should at least meet or exceed that number. We want to help the investor, through further education, make investing with risk management a life skill so they will indeed be in control!