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FAQ`s

 

Spotlight's approach to investing

How does Spotlight build customized portfolios? 

Do I need to have any financial knowledge to use Spotlight?

My brokerage has asset allocation tools... Can't I use these?

Why should I use an asset allocation-driven approach to investing?

Does Spotlight utilize any financial models?

Costs and subscriptions

What is the difference between the versions? Which one is right for me?

Can I change my subscription?

Can I cancel my subscription?

Service usage and applicability

Does Spotlight support my currency?

Does it matter where I live?

Conflicts of interest, investment advice and independence

Does Spotlight provide investment advice, or recommend funds and products?

Does Spotlight help me choose funds to invest in?

Does Spotlight make any money from funds?

Can I buy and sell funds through Spotlight?

Spotlight's approach to investing

How does Spotlight build customized portfolios?

We believe that your portfolio should be built on the basis of a long-term asset allocation that is customized to your unique needs. (An asset allocation is the division of investment capital across a range of asset classes, such as bonds, equity and cash.)

We also believe that thorough analysis and understanding of the portfolio is essential for long-term investing success. By examining how a potential portfolio would have performed in the past, how it might perform in the future, you’ll be in a better position to tweak the portfolio so that it’s optimally suited to you, and so that it’s got a better chance of helping you achieve your goals.

And, we believe that by having realistic expectations and a rational understanding of how the portfolio should perform, you’ll be in a better position to stay the course with confidence, through the inevitable market cycles.

 

Do I need to have any financial knowledge to use Spotlight?

Absolutely not! It’s our very objective to offer the very best investing service in as simple a way as possible, accessible to anybody who has an interest and wants to take control of their financial destiny.

We use a step-by-step process, and only go as fast as you’re comfortable with. At every step of the way, we provide commentary, help, valuable insights, assistance in interpreting the results, and suggested actions.

Also, we have extensive additional material to help on any particular topic that you have, and are happy to answer any questions that you have that you can’t find an answer to.

Remember that we have two versions of the service available, 60W and 100W. The 60W service is ideal for users with absolutely no experience, all the way up to those who are fairly knowledgeable and experienced. The 100W service should only be used by the most financially savvy users.

 

My brokerage has asset allocation tools... Can't I use these?

Online brokerages are great for convenient, cost-effective execution of trades and portfolio implementation. And that’s what we recommend you use them for. The service they offer is well-priced and indispensible in your quest for financial independence.

Some brokerages also offer asset allocation tools. Our view is that most free online tools generally provide a high-level view of a topic, and often only offer a superficial treatment of the concepts that underlie the field. The risk of these tools is that users are left feeling confident that they have done sufficient work, but often this is really a false sense of confidence as they aren’t aware of details or information that was missing or inadequately covered.

The business model of most brokerages is based on taking a commission on every trade you make.  It is not their primary concern that your portfolio is genuinely appropriate for you, and whether it could help meet your long-term objectives.

At Spotlight, our primary concern is to help you develop a customized investment portfolio that will help you achieve your financial goals. We make no pretenses that investing isn’t complex, so we take you through the investing process one step at a time, at your own pace, providing insight and help along the way.

And, we want to ensure that you understand the risks involved, that the decisions you make are fully-informed, and that you develop the knowledge and realistic conviction to make you confident in your ongoing pursuit of financial independence.

That’s what you pay us for, and that’s exactly what we set out to do.

 

Why should I use an asset allocation-driven approach to investing?

Time after time, studies have shown that a portfolio’s asset allocation determines over 95% of the portfolio’s risk, and explains over 95% of the portfolio’s return. (See Brinson, Hood and Beebower for more.)

What does this mean? Well, if you used an approach to investing that favored active management and fund selection over asset allocation, for example, you would be focusing your efforts on an aspect of portfolio construction that has negligible impact on overall performance. If asset allocation decisions are going to dominate the performance of your portfolio, it’s clearly best to prioritize it above all else.

Spotlight includes 19 asset classes, across equity, fixed income (bonds) and alternative investments.

 

Does Spotlight utilize any financial models?

Spotlight uses the full power or many financial models and modeling techniques that are proven to work well. We’re also the first to admit that some models have limitations and are based on assumptions, which is why we incorporate many different approaches to determine the most robust and reliable solution.

Some of the models and techniques we use are mean-variance optimization, efficient frontiers, Monte Carlo analysis, Value at Risk and stress tests, to name a few.

But remember, this all happens 'under the hood' - all you'll see is a simple process through a well-designed interface that hides all the complexity.

Costs and subscriptions

What is the difference between the versions? Which one is right for me?

The 60W and the 100W services have been built with different purposes, people and objectives in mind.

The 60W version is ideal for those who don’t have much (or any) existing investments knowledge, or who are time-strapped, and who want a robust solution without fuss or in-depth examination and analysis.

The 100W service is great for those who already have reasonable knowledge and understanding of investments, and who actively want to spend time doing detailed analysis to develop a greater understanding. Many of the users of the 100W service are investment professionals and financial planners. It offers you all the power and functionality available to the best in the business!

Besides the additional features, functionality and scope of the 100W service, it also has a different user interface and branding. This service is branded Floodlight Investing (get it? A LOT more light cast).

 

Can I change my subscription?

It is possible to upgrade and downgrade between the 60W (standard) and 100W (advanced) services.

Please note that an account upgrade will attract additional costs totaling the published difference between the prices of the two versions (irrespective of purchase under any incentive program).

Downgrading to use the 60W version, for whatever reason, is free but will not result in any refunds or reimbursements being paid.

 

Can I cancel my subscription?

A 30 day trial period exists for both versions of Spotlight.

Spotlight will record your payment details when you sign up, but only charge you 30 days after this time. You can cancel your account without hassle or question at any time during this period and no charges will be levied on your account.

Service usage and applicability

Does Spotlight support my currency?

Spotlight has support for three currencies – the Euro, US Dollar and UK Pound Sterling.

You can choose to use any of these three, based probably on the currency in which you make money, spend money, and invest your money.

If you use a currency that’s not either of the three listed above, you can still use the service, but will have to perform the portfolio construction process and various analyses using one of these currencies.

 

Does it matter where I live?

Spotlight is available to everybody, regardless of where you live.

That said, while investing is becoming an increasingly global activity, you may have specific local conditions that impact your approach to investing. For example, your country of residence may affect the ability to trade in certain products (e.g. owning products offshore) and impact the kind of portfolio you might build.

We have focused on serving investors based in three regions – the US, UK and the EU. This doesn’t mean you can’t use the service if you’re from countries outside of these regions, but our ability to help you select funds will be restricted. This aspect of the service is, however, only a small component of the overall service.

Please note that the tax implications (e.g. income and / or capital gains taxes) are not taken into account in Spotlight. Furthermore, note that you should always consider investigating any results or solutions that you obtain using Spotlight yourself, possibly with the assistance of a lawyer, accountant or tax expert.

Conflicts of interest, investment advice and independence

Does Spotlight provide investment advice, or recommend funds and products?

Spotlight does not provide any investment advice or product recommendations.

The Spotlight service attempts to provide you with a service that reflects an approach to understanding the investment environment and a means of constructing an investment portfolio. It does not purport to be the only or best way of doing either function.

Additionally, the product and fund results obtained through using the service do not constitute investment recommendations. They are the results obtained after applying a number of filters that filter a fund database based on your unique circumstances and considerations. Investing in any portfolio is ultimately a decision that you need to take on your own.

 

Does Spotlight help me choose funds to invest in?

Spotlight has a very large database of approximately 10,000 funds. Part of the Spotlight service is to help you choose funds that you can use to invest your portfolio.

You can play as involved a role as you’d like in the fund selection task. We’ve got what we call ‘fund palettes’ that allow you to arrive at a set of potential funds in just a few clicks. This is great for those who are firm believers in the power of asset allocation and who don’t want to spend much time on fund selection.

Alternatively, you can tap into our fund database and fully control the fund selection process, based on whatever criteria you’d like. This would work well for those who’ve got knowledge on the universe of funds and the fund selection process. Here, too, we’ve also made available a few filters that’ll help narrow the range down to a subset of eligible funds quickly.

However, whichever approach you choose to use – the ‘quick solution’ approach using pre-built fund palettes, or the detailed approach that is fully under your control – the role of Spotlight is to apply a set of mechanistic filters to narrow down a large database of funds to a smaller set that you should focus your attention on. For example, we have filters that ensure that the funds you see are appropriate to your currency, to your country of residence, to your unique asset allocation, and that ensure that the funds are available to you based on the amount of money you’re probably looking to invest in them.

 

Does Spotlight make any money from funds?

Spotlight does not make any money, either directly or indirectly, in any way, from any of the products, funds or securities in our database or shown through the service.

Through the service we have simply provided a mechanistic way of finding some of any number of appropriate products and funds that appropriately represent the ownership of an asset class.

 

Can I buy and sell funds through Spotlight?

Spotlight is not a trading platform. One day we might choose to offer the functionality to purchase market instruments more directly, but for now you cannot trade through Spotlight.

We have specifically chosen to focus on helping you build your investment portfolio and understand all aspects related to that. By remembering why we’re here and why we started Spotlight we hope to excel in doing just that. And, frankly, it’s by far the most important part of investing, and a big enough job as it is!

Spotlight will provide you with your own customized portfolio, based on an asset allocation that will help you achieve your goals combined with investable funds that are appropriate for you and your circumstances. You can save and export all details of your portfolio, which you should then take to a brokerage to invest.

 
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