How Seasonal Tokens Make it Easy to Generate Alpha

There are two ways to invest: Active investing and passive investing. If you’re a passive investor, you don’t make changes to your portfolio. Instead, you rely on the performance of the market to increase the value of your investment over time.

Active investors continually change their investments, trying to beat the market by picking stocks that will do well in the short term. The component of the investment’s performance that comes from actively managing the portfolio is known as alpha.

Finding an investment strategy that consistently achieves a high alpha has been called the Holy Grail of investing. Beating the market is hard, and passive investors who simply buy and hold stock indexes such as the S&P 500 tend to outperform active asset managers most of the time. This has resulted in a trend towards passive investing, and many investors have concluded that trying to generate alpha is futile.

Seasonal Tokens were designed to allow investors to generate alpha easily. The four tokens, Spring, Summer, Autumn and Winter, have been designed so that their prices will slowly oscillate around one another over the course of years. In the long term, they’re equally valuable, but today, they have different prices. This allows investors to trade the more expensive tokens for the cheaper ones and increase the total number of tokens in the investment. Later on, those cheap tokens will become the most expensive, and the investors can trade again.

By following the rule: Always trade tokens for more tokens of a different type, investors can continually increase the total number of tokens in the investment. This means that the investment will grow in value even if the average price of the four tokens doesn’t change over time.

Trading tokens for more tokens is an investment strategy that generates alpha. It outperforms the passive investing strategy of buying tokens and simply holding them for the long term.

Unlike Bitcoin, which was designed to be money, and Ethereum, which was designed to be a public computer, the tokens are an attempt to engineer the ideal investment, by making the goal of active investing, namely generating alpha, easy to achieve. Because it’s possible to profit without relying on the performance of the market, Seasonal Tokens have an investment value that doesn’t depend on the possibility that they’ll rise in price over the long term.