About Alphament Strategy Creator

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Charlie Q. Yang, Ph.D., CFP®
My name is Charlie Yang, the creator of Alphament Investing Strategy. I am the lead financial technology consultant at AFIEA (Advisory for Financial Innovation, Evaluation, and Assessment), formerly known as the Institute for Systematic Investment Research (ISIR), and founded by myself in 1997.

​Through AFIEA, I have been consulting for firms on AI-powered portfolio management, robo-advisor design, and quantitative investor behavior research. 

​As an engineering doctorate with an aptitude for scientific discovery, my earlier career devoted myself to the success of mobile communications. What do Wall Street and wireless data have in common? Uncertainty. Problems associated with data transmission are very similar to issues a financial planner faces - designing the optimal plan (system) to reach a goal (destination).

In 1994, I discovered a new probability distribution to capture non-normal statistics. My curiosity drove me to work in the financial industry. I have pursued my research to learn how to detect intrinsic value over market noise and eventually led to the discovery of Alphament Investing Strategy.

The financial industry’s growth can only be sustainable by adding measurable value when serving investors. ​To start the conversation, text me at 310-528-5511 or email me at cqyang@afiea.com. ​

Fundamental Research Works on Alphament Strategy

  • One very serious problem in the financial industry today is lacking a set of scientifically sound and easy-to-understand measuring standards for investors to uncover many flawed investment strategies sold to them. Informed investors must learn how to measure the added value if any, of their investment advisory to prevent losses due to wrong claims and unjustified fees.
  • To understand and appreciate why the Alphament Strategy is much superior to other traditional equity trading strategies, investors can do a performance benchmark analysis by examining if a few important measures, including Maximum Drawdown, Up/Down Market Capture Ratios, as well as Annual Return.
  • There are a few well-known financial theories to help understand the stock market behaviors. When we start to question and challenge existing academic foundations, it is not difficult to find out that academic research works have masked some of the lousy products and even fraudulent actions in the financial services industry. The root causes are those academic theories with non-realistic and over-simplified mathematical assumptions.
  • We all know that the stock market is unpredictable and difficult to model, and its price and volume movements are directly driven by human behaviors, less so and indirectly by various fundamental and technical factors. Our research has led to the discovery and formation of the Capital Market Behavior Theory (CMBT) which becomes the basis for the Alphament Strategy.
  • The general understanding of the financial industry has been that return and risk are real and fundamental. Therefore we have been so used to and positive for any description of the capital market by Nobel Prize-winning economics works. That led us to believe that the modern portfolio theory and related academic research are true descriptions of the market.
  • If we have observed the stock market movements more in-depth and long enough, many of us have seen evidence that return and risk (standard deviation) are not fundamental. They are derived or emergent concepts. We all know what temperature means. It means something to be hot or cold. Scientific discoveries taught us that temperature is just an emergent idea and the fundamental idea is the motions of atoms. The fundamental motivation to have new financial market research is to discover the scientific phenomena governing each trading tick’s movement (similar to atoms in physics).
  • Since 1995, I have been trying to capture my findings through the framework named the Capital Market Behavior Theory.
  • The key to the development of modern portfolio theory (MPT) is the placing of severely simplifying assumptions on risks. The behavioral content is ignored and only price volatility characterized by the standard deviation or beta is considered. The MPT failed to interpret and prevent the global financial crisis and capital market panic in 2008.
  • From the day in 1995 when I discovered how unreliable and inaccurate the Normal distribution (bell-curve) is when being applied to the stock market movement as a statistical model, I started to question the financial industry’s academic foundation. What Wall Street has been using are all the derived capital market measures from the modern portfolio theory. They are just emergent ideas. They are all built on unrealistic and oversimplified assumptions on their roots and thus can be so easily misused to make the theory superficial and flawed, even to cause a financial crisis.
  • The stock market trend switches from quantitative change to qualitative change. The unpredictable future significant forces (various events such as political policy change) can trigger the change transition. The stock market trend continues during the quantitative phase. It can be detected when the transition to the qualitative phase happens. The process of quantitative change occurs when the economic cycles are gradually improving (bull) or deteriorating (bear) without significant (material) new forces (events).
  • With the new scientific discoveries being validated by real-world data, we have finally formulated the BB-Sigma Index as the engine for the Alphament Strategy to pinpoint the actual fundamental ingredients that make up our investment concepts of return and risk.
  • Investor Behavior Metrics research attempts to capture market investor behavior sentiment as a validation signal for investors to understand the current market emotion.
  • The investor behavior measurement research has led to the development of the BB-Sigma Index. It is a scientific indicator measuring the capital market sentiment, originally developed by ISIR in 1997. It is an indicator solely based on intra-day market trading actions to identify market trend changes. It can be used as a market psychology measure or as a long-term market cycle indicator.
  • The IndexCube Stock Popularity Machine is based on the BB-Sigma Index that is a scientific indicator measuring the capital market sentiment, originally developed by Dr. Charlie Q. Yang at the Institute for Systematic Investment Research (ISIR) in 1997.
  • The BB-Sigma Index is an indicator solely based on intra-day market trading actions. The IndexCube machine displays the BB-Index in real-time by AI-powered statistical algorithms The machine has been continuously improved for robustness and extensively validated.
  • Because the IndexCube machine can identify market trend changes, it has been used as a market psychology measure for forming the Alphament Strategy with over 90% short-term trading success rate or as a long-term market cycle indicator for guiding economic or investment policies.
This website is provided for informational purposes only. The content is not a prospectus, circular, or representation intended for use in the purchase of any securities. Investment products, including portfolios derived from the strategy presented here, are not federally or FDIC insured, and involve investment risk, including possible loss of principal and fluctuation in value. Consult with your tax advisor or attorney regarding specific tax issues.
Past performance is no guarantee of future results You should consider the investment objectives, risks, charges, and expenses of any investments carefully before investing. The market price for any portfolio utilizing our strategy is based on supply and demand which fluctuates daily based on many factors, such as economic conditions and global events, investor sentiment, and security-specific factors.
There is no assurance that the objectives of our strategy will be attained. Our views and opinions regarding the prospects of our portfolio holdings, any trading actions, and the economy are "forward-looking statements" as defined under the U.S. federal securities laws which may or may not be accurate and may be materially different over future periods.
Generally, forward-looking statements can be identified by terminology such as “believes,” “expects,” “estimates,” “may,” “will,” “should,” “anticipates,” “projects,” “plans,” “intends,” or other comparable terminology and by discussions of strategy. All statements involve known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the website creator, which may cause the strategy’s actual results to be materially different from those expressed or implied by such statements.
Alphament.com is sponsored by American Financial & Investment Education Alliance (AFIEA.org)
​and American Financial Innovation, Assessment, and Evaluation (AFIEA.com)
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