The artificial intelligence-based investing tool iFlip is leveraging technology and mathematics to empower people's finances, co-founder and CEO Randy Tate told Benzinga.
'No One Seems To Remember 2008'
The Financial Learning Information Platform, or iFlip, is an automated and self-directed investing software platform.
Tate and co-founder Kelly Korshak saw a fundamental flaw in the way mutual funds operate: fee structures and poor management were weighing on growth opportunities, Tate said.
"When you look at mutual funds that have Sharpe ratios of 0.35, that is crazy risky — but no one seems to remember 2008."
The software uses mathematical algorithms to "hedge people out of the market" and avoid large downturns, he said.
Last year, iFlip’s algos beat the S&P 500 by 12% while owning the S&P only 60% of the time, according to the company.
Backtesting iFlip’s platform over the past 20 years revealed that users would have saved a hypothetical $70,000 in asset management fees in that time period, significantly improving its value proposition for prospective investors, according to the company.
The platform's signature offerings are portfolios comprised of S&P 500 stocks and the S&P 500 itself.
The approach is conservative, and the underlying algorithms allow for accounts to perform at or above the market, according to iFlip.
A Flat Subscription Rate
Every iFlip user has an individual portfolio, Tate said: the platform does not maintain funds or pools of investor money.
"Each individual stock inside the individual person’s portfolio has its very own algorithm."
As an example, a portfolio might consist of Amazon.com, Inc. AMZN, Netflix, Inc. NFLX and Facebook, Inc. FB — with the algorithms trading those assets independently of one another.
No commissions or asset management fees are charged. Instead, iFlip is sold for a flat SaaS subscription rate.
The fees don’t scale, Tate said.
"The most you will ever pay on our platform is $79 dollars a month, and that’s for accounts $50,000 and larger," he said.
"We leave a lot of money on the table."
Mobile App Set For Release
The company plans to release an iFlip mobile app after a final round of testing that offers automated and self-directed trading.
iFlip also offers a B2B platform geared toward financial advisors.
“We have several advisors that are now using this to manage their clients' money because it's cheaper,” Tate said.
Later, this fall, iFlip plans to release a peer pricing platform.
“If you want to be on the algorithmically driven automated trading piece, that will be free up to $6,000," Tate said. "From $6,000 and up, you will get access to more portfolios that are prebuilt.”
The prebuilt portfolios will consist of cannabis stocks and firms operating on the periphery of the cryptocurrency and blockchain space, the CEO said.
“We are going to have a crypto portfolio made up of those companies so, this way, you can truly get into the crypto game without having to guess what coin to buy.”
Custom Algorithms
Neat features on the iFlip platform include the ability to backtest “every stock, with every algorithm, all the way back to 2004,” Tate said.
Customers can build custom algorithms as well.
The platform is transparent: the math behind the algorithms is explained in detail.
“We want to empower people to do it themselves, but with a really nice assist," Tate said. "We are giving them a tool that will help them immensely.”
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