Stock Market Prediction: Low-Risk Strategy


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 1st, 2020, to December 31st, 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 four separate tiered portfolios, which are rebalanced on different weeks by implementing the signal outlier filter on Wednesday. Each portfolio holds the 20 most predictable assets, and assets cannot be repeated between portfolios, so some portfolios will have fewer than 20 stocks. The portfolios are tiered weighted; when there are fewer than 20 stocks, the rest of the money stays in cash. In this context, “tiered” means that stock weights are assigned based on forecasts of signals. The signal outlier filter ensures that stocks with signals outside of the chosen range, i.e., those with extreme values, are not considered.

The strategy provides a positive return of 85.46% which exceeded the S&P 500 return by 38.45%. 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 1st, 2020, to December 31st, 2023.

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