“It became evident to me over a quarter century ago that relying on basic buy and hold strategies, asset allocation, diversification, and basic rebalancing methods fall short of truly protecting our clients in down markets.
The new century brought with it several bear and market corrections that wreaked havoc on investor portfolios, despite the use of Modern Portfolio Theory in portfolio constructs. It was a wake-up call for so many of us, realizing the devastating financial impacts these early years had on so many lives. Protecting our clients in down markets requires not just strategy, but ongoing active management and oversight of the ever-changing market conditions.
We take great pride in having built a shepherd-minded company that embraces the deepest of sentiments in helping you protect and enhance your clients’ ability to attain financial security and accomplish their goals.”
As shepherds protect their flock, our kingdom-minded mission is to deliver financial security through a premier suite of SHEP investment solutions, striving to protect investors in major market downturns and positioned to deliver performance with less risk.
Our SHEP Advantage is a key point of differentiation, combining our powerful SHEP technology platform with a proprietary algorithm—the SHEP Edge. SHEP leads with protection across ever-changing market cycles, seeking opportunities to compound more and more shares over time.
The SHEP Edge is our proprietary trading algorithm, powered by 63 proprietary risk and buy opportunity metrics. It is the key driver to all SHEP model portfolios and investment strategies. By design, the Edge seeks to successfully time the exit and reentry points in pursuit of enhanced long-term performance with less risk.
We partner with institutions, RIAs, and their investment advisers by providing access to SHEP Advantage portfolios and custom strategies. Partner firms can gain access through their TAMP relationship, or we can introduce them to ours. We may also serve as Sub-Adviser to registered and exempt investment companies.
We uphold the highest standards of moral character and integrity; operating with clear transparency and candor.
We are fully devoted to acting in your clients and our employees’ best interest above all.
We are committed to continuous improvement and delivering best-in-class performance.
We know that trust is earned not just through verbal platitudes. We understand that gaining trust through delivering results is about putting your clients’ best interests and safety above all.
Success starts with envisioning a well-defined destination. We consider our efforts an achievement when your clients realize financial freedom.
Our Stone Wall Financial team has accumulated several decades of experience in risk management, regulatory compliance, technology, private wealth management, private banking, investment strategy, securities analysis, and data & analytics.
President, CEO
Managing Principal, COO
Partner, Market Strategy
Chief Compliance Officer
Partner, General Counsel
Senior Data Analyst
Additionally, we have assembled a dynamic team of talented and innovative experts in their respective fields, spanning across regulatory compliance, technology, data science & analytics, artificial intelligence, and marketing. As resources, their collective insight and precision has been a key enabler to SHEP’s product development journey and our adoption of evolving technology in pursuit of delivering best-in-class risk-adjusted returns.
Digital Product Development
Digital Product Development
IT Architectural Design
Data Scientist, A.I.
Marketing & Distribution
Regulatory Compliance
Stone Wall Financial continues to grow a meaningful network of partners and other resources capable of contributing to our development and delivery of SHEP solutions.
Stone Wall Financial is a Registered Investment Adviser firm, founded by partners who collectively represent many decades of industry experience in technology, risk management, private wealth management, brokerage, private banking, financial planning, and securities analysis. Our firm delivers a full suite of our SHEP solutions as a Sub-Adviser to investment advisers, registered and exempt investment companies.
Our mission is the driving purpose behind all we do. We understand that trust is not built on just verbal platitudes, but through delivering desired outcomes. To do so, we seek to provide access to SHEP solutions through a variety of channels through partnerships we establish with institutions and their financial professionals. Only then are we able to deliver on our mission to provide financial security to individual investors through tactical strategies that may provide downside protection with enhanced upside performance.
SHEP is our proprietary algorithmic trading platform. It combines the power of a robust technology system with our SHEP Edge algorithmic formulae designed to mitigate clients from risk during major market downturns and make an informed rules-based, data driven decision for reentry.
The SHEP platform combines both Modern Portfolio Theory (MPT) and technical analysis to build and manage optimized portfolio constructs capable of addressing any client’s needs or circumstances. Each portfolio is anchored by a highly advanced quantitative technology platform and MPT principles of risk/reward maximization. Through integration to custodial platforms, SHEP is adhering to its strategy and pursuit to successfully protect and enhance portfolio performance. All securities in SHEP portfolios are individually optimized to seek protection and performance across ever-changing market cycles and conditions.
Our platform leverages proprietary advanced algorithms and real-time data analysis attempts to identify trading opportunities with precision. It’s designed for anticipating and preempting protective actions ahead of major market downturns that seek enhanced performance, while offering unique investment management that may not be available on other platforms.
We use a combination of AI augmented machine learning, statistical models, and historical data to optimize and continuously refine our SHEP algorithms. This helps to ensure that our trading decisions are based on the most accurate and up-to-date information.
Security is a top priority. We employ state-of-the-art encryption, multi-factor authentication, and other security measures to protect our platform and ensure that our transmissions to manage our SHEP Advantage data transmissions are secure.
Presently, our SHEP platform is proprietary and not available as a subscription service. Stone Wall Financial operates as a Sub-Adviser, ready to partner with institutions and their financial professionals to provide access to our full suite of SHEP solutions.
Our use of Augmented Intelligence with machine learning helps to automate the parameter tuning process in advanced algorithmic models, like the SHEP Edge. This is of great value to support our efforts to ensure that every SHEP security and model is optimized with greater efficiency and accuracy, reducing the risk of human errors in hopes of improving the model’s predictive capabilities.
Augmented Intelligence is capable of processing vast amounts of data at high speeds, identifying complex patterns and trends that may not be apparent to human analysts. The ability to analyze and learn from large datasets enables Augmented Intelligence features to make more accurate and timely predictions about future market movements.
The most notable example is how we leverage Augmented Intelligence machine learning in our portfolio optimization strategy. By using machine learning with our rules-based, data driven algorithms we are able to better analyze historical data and market conditions. Our research has shown great potential for producing significant increases in portfolio returns while minimizing risk. For this reason, our SHEP models will periodically recycle our optimization process. Doing so increases our confidence that these models are better positioned for the opportunity to outperform other traditional methods.
Yes, the platform has undergone extensive and rigorous testing using over 30 years of historical market data. We confidently conclude that the accuracy in displayed hypothetical performances sourced from the SHEP platform has undergone a thorough examination by a highly credible third-party resource; concluding that the SHEP Model is logically constructed, internally consistent, and is, in all material respects, arithmetically accurate in terms of its formulae, algorithms, calculations and performance results.
CLICK HERE to review the SHEP Model Audit: Findings Report by BDO.
We understand and embrace our duty as a fiduciary. With great diligence, we evaluated SHEP’s responses across many market conditions using both in-sample and out-of-sample data.
In-sample testing allowed us to “train” our SHEP Models to optimize their ability to identifying patterns and relationships within the historical data. This ensures that SHEP Models performed well under “known conditions.”
Out-of-sample testing, most critically, enables us to evaluate the Model’s performance with “unseen data.” By this measure, we are able to realistically conclude, by the measure of SHEP’s robust and predictive nature in real-world scenarios, how SHEP Models are capable of delivering in the future.
Out-of-sample testing is important because it tests the model’s ability to generalize how it should respond to new unseen future data. This step helps us ensure that we have avoided “overfitting.”
Overfitting is an undesirable machine learning behavior that can occur when the use of machine learning models fit too closely to its training data. Through out-of-sample testing, we can affirm if our SHEP Models aren’t responding as intended when faced with new data (the future).
Conducting these tests on our Models helps to ensure our SHEP strategies are not just tailored to past data but are likely to make accurate predictions in future market conditions as well.
We use a variety of performance metrics, Sharpe ratio, maximum drawdown, Beta, Alpha, annualized returns, trading analytics and tax leakage, to evaluate our models. These metrics provide a comprehensive view of our SHEP models’ hypothetical results in risk-adjusted returns, stability, and overall effectiveness in different market environments, as measured against its relative benchmarks.
While it’s true that timing the market can be challenging, historical data shows that certain market indicators and economic trends can provide valuable insights. For instance, understanding and using a combination of momentum, trends, and technical analysis can help identify potential entry and exit points. It’s not about predicting the exact highs and lows but about making informed decisions based on data.
Our model strategies are built to seek protection first, intentional on managing or mitigating risks of anticipated major market downturns. Although our trading frequency differs across our SHEP optimized securities, many may go months without a single trade. With precise focus on keeping clients on “the right side of the market,” we don’t rely solely on market timing. We build diversified portfolios using asset allocation, leading with risk management first, and then empowering the SHEP Edge to determine reliable reentry points. Our research has revealed effectiveness capable of increasing the potential for enhancing returns with less risk. The SHEP Edge is intended to be robust and reliable, poised to respond to the ever-changing market conditions without relying solely on timing.
Advancements in technology and machine learning have significantly improved the ability of investment professionals to analyze vast amounts of market data in real-time. Predictive models and algorithms can be very different. Effectively built platforms like SHEP can identify patterns and trends that simply may not be visible to the human eye. There are universally accepted advantages with algorithmic trading platforms. One in particular, is the absolute, purely rules-based, data driven approach to decision-making, is not cloaked by human behavioral biases and subjectivity. With SHEP’s robust and more systematic approach to market timing, while not foolproof, it adds a layer of sophistication to the decision-making process.
With Stone Wall Financial as a Sub-Adviser, you remain in the driver’s seat as your clients’ primary adviser at all times. You are of course free to enlist or withdraw clients’ from SHEP® Advantage or Custom actively managed solutions at any time. Our role is to ensure timeliness in transmitting model changes through your TAMP or ours, consistent with the mode’s strategies you’ve selected. Your TAMP, in order to execute SHEP models on your behalf, will require your clients to sign a Letter of Authorization (LOA) allowing your TAMP partner to ensure timely trades of SHEP transmissions.
No. You would not incur any expenses to work with our partner, SMArt-X. All of the expense for onboarding, training, and migrating your client accounts are all covered by us. Additionally, we also cover the ongoing support costs SMArt-X provides you, as well as your own white-label website solution. The website will be your primary resource for overseeing your clients’ accounts, performance reporting, billing, and investment management needs.