Yvette’s inbox dings at 3:02 pm on 13 May 2038. It’s the list of trades executed by the algorithms that day. A quick review raises no red flags, which is good because she is headed into a sign-on meeting with a new client.
“I need this money in the next four years, and I’m worried about buying stocks while they are at all-time market highs,” Alex, the new client, explains. “And I really don’t want to invest in tobacco or marijuana companies.”
“I’ll include all of that in your investment policy statement,” Yvette says. “I should have the draft to you by tomorrow. Do you have any other concerns?”
The meeting ends and Yvette returns to her desk. The IPS is almost finalized. She just adds the environmental, social, and governance (ESG) restrictions and forwards it to Alex for electronic signature.
Yvette opens her coding integrated development environment (IDE) and revises the algorithm she has written for Alex, excluding tobacco and marijuana companies from Alex’s personal investment universe. Though some of these companies are included in the investment universe of Yvette’s firm, such client-instituted restrictions are fairly common. At 5:38 pm, Yvette forwards Alex’s final algorithm and IPS to compliance for review and then gathers her belongings to head home for the day. [Read more at the CFA Institute’s Enterprising Investor blog…]