TIPs (Trend Identification Parameters) is a quantitative approach that uses technical analysis and momentum models to identify price trends in attempting to provide superior investment results. These proprietary models and formulas were created by Dr. Robert J. Stalla, who is well-known for his extensive review course for Chartered Financial Analyst (CFA) candidates.
Security price behavior suggests that cyclical patterns and random events have a more pronounced effect on prices of securities than traditional linear mathematical models. Employing basic regression techniques, the TIPs program helps to identify the underlying price trends of securities. Based on these trends, any security in a universe can be ranked by its own individual price projection relative to others in that universe.
TIPs calculations are performed on a weekly basis incorporating the most recent pricing data, adjusted for dividends, splits, etc.. This process generates a price projection, or “expected return” for all of the securities in our common stock, mutual fund and ETF universes. These expected returns can be utilized to construct new portfolios, or to modify existing portfolios.