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Bassi Model Based on the results of earlier cutting-edge research, Bassi Investments created a proprietary model (now known as the Bassi Model™) to select and weight a portfolio of firms that would be expected to outperform the market, based on the research results. This quantitative model was developed using four years of training data (1996 to 1999) and tested on five years of market performance. The hypothetical back-tested portfolio, selected and weighted annually based on the rigorous application of the model rules, performed well in both the bull market of 1997-1999 and the bear market of 2000-2001. Overall, this hypothetical portfolio had an annualized return of 16.3 percent for the five years, compared with an annualized return of 9.2 percent for the S&P 500 index for the same period. Further, the finding that training is a significant predictor of future market performance has a strong theoretical basis under the “efficient market hypothesis.” In most cases, training data are not available to investors in the market, so the expected future benefits of a company’s training investments (unlike expected benefits of its many other financial investments or practices that are publicly-known) are not already systematically incorporated into its current stock market price. As a final test before the decision to create an investment firm, the Model was tested “out of sample,” applying it to data that had not been included in the development of the model specifications. Based on the positive results of this test, Bassi Investments was incorporated, and began actively managing funds in December 2001. Four recent research papers and articles by Bassi Investments researchers are publicly available for additional reading. These include one full academic paper, one descriptive white paper, and two descriptive articles:
NOTES: This page includes discussion of past research results involving the performance of a HYPOTHETICAL set of portfolio recommendations. They represent the back-tested performance of a series of annual portfolios selected based on Bassi Investments’ proprietary model. There are limitations inherent in model results, including the fact that the results do not represent actual trading and may not reflect the impact of material economic and market factors on the advisor's qualitative decisions when managing client assets. The hypothetical results include the performance of securities and classes of securities that are not included in Bassi Investments’ current portfolio recommendations. The model is frequently revised, and such revisions may affect future results. Actual and hypothetical Bassi Investments performance include dividend reinvestment and are reported after deducting all fees (management, brokerage, and custodial). This hypothetical performance is not a guarantee of future results and is not indicative of actual results for any past or present clients. Your actual performance may vary. |
