Investment Philosophy

You deserve to live confidently,
regardless of market conditions.

We practice a tactical allocation strategy that is straightforward and effective: Align clients’ investments with the markets when conditions are favorable – and preserve clients’ assets when market conditions are not. The strategy is based on a disciplined investment process that relies on a custom set of indicators which determine when to accept market risk, or become more defensive. No emotions. No subjective decision-making.

Our goal is to achieve each client’s financial goals with less volatility than is typically associated with equity investing.

Discipline drives performance. Our beliefs drive everything.

  • We are tactical.
  • We are committed to our process.
  • We have the discipline to do what we say.

Our research tells us what to do. Our clients tell us we’re doing things right.


Our key indicator is “relative strength.”

  • Relative Strength is a simple, but effective market indicator. In basic terms, “relative strength” measures (in real time), how one asset class is performing relative to the broad market and to its peers. It forms the basis for our portfolio construction and risk management process. Relative strength allows us to identify potentially the strongest performing investments as well as the weakest, within any market.
  • We constantly monitor the relative strength battles: large cap equities vs. small cap equities, growth vs. value, international vs. domestic, or even cash vs. equities. By making these multiple comparisons, our portfolios are aligned with potentially the strongest asset classes and investments. Other factors that drive our decisions can enhance your performance.
  • We utilize “fundamental” and “technical” analysis. Fundamentals tells us what to buy (Earnings, P/E ratio, Revenue).Technical analysis can help tell us when to buy and, most importantly, when to sell. We firmly believe that using both of these analytical tools increases our probability of making better decisions on behalf of our clients and is vital to successful investing.
  • We embrace market volatility. When stock prices are falling and indicators turn negative, we take action and shift to wealth preservation and play defense. Conversely, when stock prices are rising, we accumulate equities. Heeding the markets (and ignoring the noise) can help client portfolios significantly outperform the market.
  • The “math of losses” is our ongoing concern. Clients’ assets cannot suffer losses and be expected to easily recover. For example, a significant downturn that affects a portfolio’s value by, say, 35% would require a gain of 54% (just to get back to even). Few (if any) investors feel comfortable with this scenario. That’s why we help monitor both wealth preservation and accumulation in our clients' portfolios.
  • We put a value on cash. Similar to military strategists, we recognize that “regrouping and regaining strength” are critical to success. When risk is high, we reduce equity exposure and may not be fully invested. Using cash as a hedge allows us to design a portfolio that helps reduce market risks.  Why? Because cash can be immediately invested in markets when opportunity arises.
  • Obviously, no investment strategy works perfectly every time. The market provides many opportunities to over- or under-emphasize the wrong investments. The goal of our tactical approach is to deliver more satisfying results than traditional buy-and-hold strategies. At times, we know that our strategy may miss some upswings in order to avoid downside risk. However, we believe that our clients benefit over the full cycle of the market, through our constant attention to managing risk and focus on reducing downside volatility. By consistently adhering to our process, investors know what to expect from us. After all, investing is not a sprint – but a marathon. We recognize that a proper pace and discipline are key to helping investors succeed financially. Long-term investing is no different.

 

 

Technical Analysis is only one form on analysis. Investors should also consider the merits of Fundamental and Quantitative analysis when making investment decisions. Technical analysis is based on the study of histoical price movements and past trend patterns. There is no assurance that these movements or trends can or will be duplicated in the future.