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In general, applying the techniques of quality to money management (Quality Money
Management) will provide better trading/investment systems for seed capital providers,
investors, and employees.^21 (While this book is written from a new product development
perspective, because we believe in continuous process improvement this book can also be
read from K|V 1.1 as the steps a product team would engage in to implement a fix or an
enhancement to an existing system.)1.9. Who Is This Book For?
This book is primarily for financial professionals involved in trading/investment system
design and development, risk managers, seed capital providers, and even auditors per-
forming due diligence or SAS 70 audits. If you fall into this category, you are already
well aware of the drive toward automated trading, money management, and execution
tools and systems, and this book should provide valuable techniques for implementing
quality. As you will see, our methodology (the Kumiega | Van Vliet methodology, which
for shorthand we call “ K | V ” ) applies to development and evaluation of disparate trad-
ing/investment systems, regardless of strategy, holding period, benchmark, or market,
including:● Fully automated, or algorithmic, trading/investment systems including both market
making and market taking style systems.
● Partially automated trading/investment systems.
● Trade execution systems.
● Trading/investment systems that use third-party indicators, execution, and position
selection software as opposed to building proprietary ones.Our methodology is strategy independent and will work equally well for:● Hedge fund style trading strategies.
● High frequency trading systems.
● Mutual fund style money management systems.
● Managed portfolios. (Especially for those implementing an asset allocation process
where the portfolio and the investment strategy are rebalanced systematically.)
● Algorithmic trade execution systems.If you are an investment capital provider, that is, you allocate investment capital to
money managers, we believe you will also benefit from reading this book. As an investor
you are undoubtedly aware of the bewildering array of investment strategies and vehi-
cles available, not to mention the cost of money management, even maybe too the cost
of hiring consultants to sift through the hoards of investment strategies and managers. If
you sit on a pension or endowment fund board, we suggest you ask prospective money
managers to discuss quality and how they apply quality management techniques to their
investment strategy design and development process. Our guess is you will not get much
of a response, or at best a very vague response. We recommend you consider investing
only with money managers who take quality seriously, who employ transparent, Quality
Money Management techniques with the investor-first goal of providing better perform-
ance at lower cost.1.9. WHO IS THIS BOOK FOR?