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The Q.ai Team
October 27, 2022

3 Reasons Our AI Might Move Your Money to Cash

3 Reasons Our AI Might Move Your Money to Cash

Q.ai boasts a whole host of benefits for investors—including a wealth of AI-powered Investment Kits from which to choose. Investment Kits can consist of shares of stocks, exchange traded funds (ETFs) and cash.

Sometimes, our AI will move your money to cash. Here are three reasons why that might happen.

1. There have been changes to the underlying security or a Kit at large

If a company within a Kit goes private, merges with another company or halts trading for any reason, our quant team closes the trade. Therefore, that money would be moved to cash.

The team may also decide to close an entire Kit and move your money to cash. The team ultimately decides how Kit concepts should be expressed with regards to structure and assets within the investment universe, but the AI takes over human involvement to select securities each week and allocate the weight for each of them. If a trend has changed, as it does with seasonal Kits, such as Back to School, our quant team may decide that it’s time to close down a Kit.

2. Weekly rebalancing needs to hit specific APEX minimums

We work with a brokerage partner, Apex Clearing, which has specific minimums that we must hit when our AI rebalances your holdings each week.

If the securities within a certain Kit appreciate enough, you could end up with less than 2% of your portfolio value in cash at the end of the week. If this is the case, Q.ai sells some of the underlying securities in your portfolio until its total value equals at least 2%, which is APEX’s minimum requirement.

3. Portfolio Protection identifies risk within your portfolio

Portfolio Protection is an AI-powered risk-detection system that can predict and respond to different types of investment risk and helps to prevent sudden losses in the stock market. 

Portfolio Protection adds hedging strategies, which means that it takes offsetting positions in assets or investments that reduce your overall risk. It does this by evaluating the historical sensitivity of your holdings to these factors and implements hedging strategies to offset any potential negative impacts ahead. One of its hedging strategies converts some of your investments into cash while also investing in hedging assets or limiting market exposure.

Q.ai may move your money to cash if it makes even a neutral or slightly negative prediction. In other words, if the water looks like it could be rough ahead, Q.ai will change course with those hedging strategies to keep you afloat. If the prediction is completely negative—as in there’s serious potential for high risk—Q.ai might move your money from cash to inverse ETFs, exchange traded funds that profit from the decline in value of an underlying benchmark. They’re securities that increase in value when the market goes down.

Learn more about how our Investment Kits invest your money, as well as how to make the most of Q.ai

Q.ai is the trade name of Quantalytics Holdings, LLC. Q.ai, LLC is a wholly-owned subsidiary of Quantalytics Holdings, LLC ("Quantalytics"). Quantalytics offers automated financial advice tools through Quantalytics Investment Advisors, LLC ("QAI"), an SEC-registered investment advisor. QIA’s investment advisory services are ONLY available only to residents of the United States. Disclosures concerning QIA’s investment advisory services are available on its Form ADV filed with the SEC. The content in this newsletter is for informational purposes only and does not constitute a comprehensive description of Q.ai's investment advisory services.

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