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Soon’s Algorithm is Opportunistic and Goes on the Offense
Many investment approaches play the “conservative” game, which is an effective investment strategy for long-term returns, but it can also be motivated by the risks of volatility. Volatility, however, can be more lucrative if you have the right strategy and tools.
Soon brings a new approach to volatility…going on the offensive and capturing value from volatility when it’s available.
Any good offensive strategy requires the ability to promptly take advantage of small opportunities that arise over time and exploit them. Soon’s algorithm is not predictive…it is reactionary, it continuously takes what volatility gives. Every time Soon takes available value from volatile assets, that portion is removed from the portfolio, thus moving more value to a stable currency. It does this all without the foibles of human bias & emotion and by taking advantage of a well-established economic phenomenon…mean reversion.
Imagine a chart showing market prices over time. No matter the asset, you will see a line that jumps up and down as time passes. Draw a straight line across the average and you’ll see the market price crosses over that line over and over again. This is called Mean Reversion, and it’s a known behavior of asset volatility. Investment gains don’t remain gains forever, and losses don’t remain losses forever.
Now, zoom in a little bit to look at the chart over a shorter period of time…you’ll notice market prices are still crossing the line. Keep zooming in and you may even see this happening by the minute, depending on the asset.
Although price shifts are typically larger over broader periods of time, the number of random instances of mean reversion can be quite significant, even when taken to the smallest measurements of time. And some assets exhibit more drastic price shifts and mean reversion during those shorter periods.
Because Soon is investing often, and in smaller amounts, and divesting when you spend (mostly small, daily purchases), the algorithm is able to utilize more instances of mean reversion. That means, more opportunities to take advantage of investment gains.
Soon invests early and often, constantly taking positions across multiple assets, at different points in time, at different prices. Each unique position will experience reversion in its own way, and by taking hundreds of positions over a year’s time, Soon creates a multitude of opportunities for price reversion to occur.
The graphic below is an example of how many price reversions can happen with just two asset types. Increasing the amount of assets and the amount of positions, multiplies the amount of price reversion opportunities, and as illustrated above, utilizing short-term volatility introduces even more opportunities. Every time the market price of an asset increases over the original price, a gain is produced. At any given moment, there may be multiple gains and multiple losses, but Soon allows losses to wait until mean reversion brings them back into a gain, taking advantage of current gains in the meantime. Over time, the more positions remaining in your Soon portfolio, the higher the probability that at any given time there will be a gain. That’s the power of probability combined with mean reversion.
Soon exudes unintended confidence by robbing volatility of the power we give to it…fear. It counters the risk of volatility by not thinking about it, making divestment moves often, and always utilizing the mathematically best liquidation at the moment of spend. By doing this, Soon removes the human emotion that so often trips up investors.
“If you cannot control your emotions, you cannot control your money.” — Warren Buffet
Because Soon’s algorithm has no emotions and doesn’t attempt to gamble on unpredictable future events, it takes away the power of fear and turns uncertainty into a virtuous investment tool.
Massive, unpredictable market downturn, known as “Black Swan Events”, are inevitable. You don’t know when they are coming, but they can have an impact on global economies, meaning almost everybody is affected. Soon’s algorithm is a financial discovery that provides a solution for those wanting to receive value from volatile assets, but don’t want to be overly exposed to Black Swans.
By constantly divesting, Soon is regularly rebalancing and reducing your exposure to market downturn by liquidating investment positions from the portfolio. The total amount of assets remains low over time, so when a black swan occurs, there is less portfolio value sitting around, with the potential to generate significant losses. It’s like a regular inoculation to the potential negative effects of volatility. Learn more about how Soon offers some protection from Black Swans.
Soon’s approach to short-term volatility makes it a perfect investment strategy for the everyday person who wants the value of investing but is unprepared to handle the emotional rollercoaster of volatile markets and the time required to navigate them properly. Soon allows everyone to spend money in the way they always have, while simultaneously and passively receiving the benefit of available investment gains. And it can be done knowing that Soon’s hungry algorithm is eagerly taking advantage of the opportunities presented by short-term volatility.
Beta is coming soon…for Soon! Make sure you sign up to be notified and get on the waitlist for early access: https://Soon.app
