The little details that matter

Welcome to our video on the Strategy Builder tool, which is available on the National Bank Direct Brokerage transactional platform.

 

Are you having trouble finding your next investment idea or aren’t sure about your investing strategy? Strategy Builder can help, with just a few clicks, sift through thousands of securities to refine your search.

 

Unlike most screening tools, Strategy Builder has a back testing function which shows you how your selected investment strategy has performed over the last 5 years versus different benchmarks.

 

To access Strategy Builder, click on MARKETS then select TRADING CENTRAL from the dropdown menu. You will then select strategy builder from the secondary heading list.

 

To begin click on Getting Started and from there click on Let’s Go to begin the screening process. For first time users, Strategy Builder will ask you a series of questions that will help you create a basic filter. To help you in this guide, next to each question, there is a brief explanation as to why an investor would want to select them. Once done click on next.

 

These filters can be modified or removed at any time, and you can add additional criteria to further refine your search. At the end click on Final rankings to see the results.

 

Now before going over the results if you wanted to skip the last section you can click on Screening which would bring you here.

 

At the top we have Preset Screens & Themed screens, which will be discussed in our next tutorial, and the Exchange. For our example let’s assume we want to invest in US securities so we will change the exchange and choose the NYSE.

 

Underneath, there are different criteria. Those with a check mark have been included in our strategy. By clicking on More Criteria, Strategy Builder will provide the complete list of filters available to select from.

 

There are 50 different categories to choose from. For our example we’ll add a few more, looking at company basics we can add Market Capitalization. On the right we have an explanation and on the left we can customize the market cap by typing or using the curser.

 

Under fundamentals, let’s add Dividend Yield and then the Dividend Growth Rate over the 5-year average. For valuation, I’ll click on TC Quantamental Ratings which is a relative ranking of the stock based on a quant model developed by Trading CENTRAL. It’s a on a 1 to 10 scale, let’s select 6.

 

We can even add Technical Analysis criteria to find bullish or bearish events. Let’s select Bullish Indicators and Oscillators.

 

Now that we’ve finished adding criteria, we can continue to customize the search by clicking on Bulk Edit. On this screen we have all our selections, and we can see the results as changes are made on this screen.

 

Let’s go through it quickly, for dividend growth rate, let’s up at least 3%, and at least a 2.5% dividend yield and a minimum stock price of $20.

 

Now that our list is complete let’s scroll down a bit and look at the results. Strategy Builder has highlighted the top 10 matches and has ranked them based on our criteria. Click on the stock to learn why it ranked first as well as other useful information. As we scroll down, we can see how it performed in each of the chosen criteria.

 

Going back to the main screen there are several columns with our chosen criteria which by clicking on them we can filter by ascending or descending order. For instance, if we wanted to know which stocks had the highest overall 5-year dividend growth rate versus their overall ranking this could be shown.

 

If we’ve chosen many criteria by clicking on Columns, we can hide the ones that are less relevant to our decision-making process or even export the data.

 

Moving further down, we can now look at the backtesting function. Step one, select the benchmark. If we would have selected a Canadian Exchange, we would have a list of Canadian benchmarks to select from.

 

Step 2, click on calculate. Strategy Builder will ask to add a name for this screen. The tool will then begin calculating a mock portfolio based on the top 10 matches based on a buy & hold reviewed every 3 months.

 

Here, the comparison is shown in chart format and just below in numbers over different periods. The investor can continue to make changes to their strategy and even compare multiple strategies to a benchmark and even change the benchmark.

 

Now, let’s say we are satisfied with the results, we can scroll up to save the screen.

 

We can add a name and description. The investor can be advised of any changes to the top 10 matches. Click on activate the Toggle Alerts and the frequency and add the email address to be notified. Lastly, we can share the strategy with other users of this tool. Once saved, click on Saved Screens to upload the strategy.

 

For any questions regarding Strategy Builder and the backtesting function, click on Help. It will link to their Frequently asked questions sections.

 

Whether you are a Growth, Value, Yield seeking, Momentum or any other type of investor Strategy Builder can help you apply your investment criteria and find the securities that best match. This concludes our video on how to create an investment strategy with Strategy Builder.

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