The investment tool

Sigmastocks investment tool allows you to create and manage your own stock portfolio. The tool analyzes data from all the companies included in the indexes we use for your chosen market. It then calculates the returns your strategy would have yielded, given you had followed it over the past ten years.

An advanced tool that’s easy to use

Whilst advanced, the investment tool can be used by anyone regardless of previous experience. The tool is based on financial research that looks at key figures that help describe a company's financial situation. These figures are used to estimate which stocks that will perform better than average for the given market. The investment tool combined with today's cheap, available and digital stock trading allows us to replace traditional actively managed mutual funds. You will cut out the expensive fund fees you pay today and save more towards yourself! 

Create your own strategy

If you don’t want to use our preset strategy developed by our research team, you can create your own. What you’ll need to consider when creating your strategy is the type of characteristics you want in a company. Perhaps you want the companies in your portfolio to have a high ratio between their profit and market value (E/P) or to have low E/P values. If you don’t have a particular preference for how the ratio of a given characteristic should be set, simply leave it neutral. You can also choose to sort out the companies and industries that you don’t wish to invest in.

Once you have set how you would like your key ratios, you will then have your portfolios strategy laid out. Meanwhile, the investment tool ranks each company based on how well they meet your strategies settings for each key ratio. Your portfolio will be a combination of companies that are the most correlated  to the desired attributes and key ratios for your preferred strategy. The portfolio you see is therefore the current result of your strategy.

The investment tool also calculates what your strategy would have yielded if you had invested according to it for the past ten years. The value development for the portfolio's benchmark index is also shown in the same graph. The tool also shows how the key ratios for your current portfolio’s strategy are related to the ratios for the benchmark index.

Trading always constitutes a risk

Trading always involves certain risks. But with the evaluation of your strategy's historical return for your portfolio, we can calculate the level of risk you will likely have in the future. Risk calculation is based on volatility, which is either measured by the standard deviation or variance between returns from that same security or market index. Given your portfolio's volatility, an area can be calculated for the likeliness of your portfolio’s value with a 95% probability. The wider the area, the greater the risk your strategy has.

Our data is updated daily

The distribution of stocks in your portfolio is updated daily based on your portfolio strategy. When new data comes in, the company's previous attributes change, and how high they rank for your portfolio will vary over time. Often there is no change at all.This is partly because the characteristics we analyze are moving slowly and partly because stock prices move in about the same way if they are within the same market. Unless of course something has happened to a specific company.

Just because your target portfolio changes daily, doesn’t mean that you will need to sell your stocks all the time. It changes because every time you want to invest more, you will be given the best possible distribution at that time. If a company has disappeared from your target portfolio in the investment tool, it doesn’t mean that you need to sell that stock. It's probably still good enough to keep since it's not worth the cost of selling it.

Save monthly or invest once

Each time you invest, the investment tool calculates which stocks are best to buy based on the date you invest. You can choose to save monthly or quarterly in your portfolio. Many also choose to invest a larger sum at first and then update the portfolio as they please. Once a year, you will receive an email notifying you that it may be time to adjust your portfolio. You can also choose to have your portfolio adjusted more often. 

Sigmastocks recommended key company performance indicators

  • Market capitalization: Indicates how big the company is based on its value on the stock market. The market cap is calculated by taking the company's total number of outstanding shares multiplied by the current price of one share.

  • Profit growth: Calculated for a company as the percentage change for the sum of reported net earnings for the last four quarters, relative to the sum of net earnings for the four prior quarters before those.

  • Cash flows to total asset ratio: An efficiency ratio used to help evaluate how well a company uses its assets to collect cash from sales. Calculated as the cash flows of operations over the past year divided by the company's average total assets for that period.

  • Book-to-Market ratio: Ratio used to find a company’s value by comparing its book value to its market value. It is calculated by dividing the company’s common shareholders’ equity by the market capitalization.

  • Profit/Market: The sum of a company's reported net profits, for the last four quarters divided by total market capitalization. Which is the same as 1 divided by the PE century. Called often "Earnings-to-Price".

  • Net profit margin: The sum of the reported net income for the last four quarters divided by the total revenue for the same period. Helps to illustrate how each kroner of revenue gained by a company translates to profit. 

  • Debt-to-equity ratio: Key ratio used to help assess a company’s financial leverage. Calculated as the sum of all current and long-term liabilities divided by the company's total shareholders’ equity.

Momentum and Dividends

Momentum is the word used in physics for the concept of movement. In finance the term means that a stock that's yielded well historically will continue to do so. The momentum ratio measures the percentage change in the company's market capitalization today relative to how is was two years ago. The dividend-price ratio is calculated as the sum of a company's total annual (trailing or forward) dividend payments divided by the total market capitalization. 

These two key ratios are often used to analyze stocks and companies. However, our research has not shown any clear historical connection between these parameters and a good future return. You can decide if you want to include them in your portfolio.

Factor investing has changed the perception of the financial market

The article Common risk factors in the returns on stocks and bonds was published in 1993 by Eugene Fama and Kenneth French. Their idea of factor investing shows that certain key ratios and characteristics of a company can predict how its shares will return in the future. Since being published, their article has been referred to 16.000 times on Google Scholar, and has created a lasting change of perception within the financial markets.

Get notified

Once a year, you will receive an email that it may be time to adjust your portfolio. You’ll get a description of how it can be done. You can also choose to adjust the holdings more often. We will help you to calculate which stocks may be replaced by others according to your strategy.

Stocks that are analyzed

Calculations on a large range of different companies are made within the market(s) you have chosen. More specifically,the stocks included in the analysis are found within the indexes for each market (see below). The Countries that  are included depends mainly on how cheap it is for Swedish customers to trade stocks in that country’s market.

To facilitate searchability outside Sigmastocks’ system, we specify the Bloomberg ticker for each index. The numbers within brackets indicate the number of stocks included in the index.

  • Sweden:  SBX Index (90).
  • Nordics: Sweden: OMX Index (30), Norway: OBX Index (25), Denmark: OMXC20GI Index (20), Finland: OMXH25GI Index (25).
  • USA: SPX Index (500).
  • Europe:  France: CAC Index (40), Germany: DAX Index (30), UK: UKX Index (100), Switzerland: SMI Index (20), Spain: IBEX Index (35), Sweden: OMX Index (30), Norway: OBX Index (25), Denmark: OMXC20GI Index (20), Finland: OMXH25GI Index (25).