Our Philosophy

Investment Philosophy

"Too many investors have their own opinions about the coming market directions, and they are frequently wrong."

Jesse L. Livermore, one of the greatest traders in Wall Street, wrote these perceptive statements in the 1920s. His insightful words are just as applicable today as they were then.

The direction of the market is not easily discernable, especially if you let  emotions influence decision-making. Accordingly, that is why we have developed indicators that unequivocally inform us of the current market trend. This takes all human emotion out of the equation, allowing us to know for sure which way the market is trending despite varying opinions. Unlike market timing that attempts to predict, we use trend following indicators.

Experienced investors know that success in the stock market is all about putting the odds in your favor. Of course, there are no guarantees, but using this trend-following approach will always keep you on the right side of the market’s major trends.  

The fact is you can make a lot of money when the stock market is advancing. And you can lose a lot of money if you remain fully invested when the stock market is falling. As a result, you should aim to be heavily invested when the market is advancing, raking in all the profits possible…and be in a defensive position (holding plenty of cash) when the market is trending lower, protecting your hard-earned capital.

Conventional wisdom on Wall Street is to stay fully invested regardless of the overall risk in the market. The philosophy being that all asset classes and sectors performance will ultimately return to the mean variance over the long run. The reality is that it may take decades for the market to recover the losses and work off the excesses of the past.

What’s more, we aim to protect wealth as aggressively as we grow it. We believe that a dynamic market requires a dynamic strategy that measures and responds to risk. On that attempt we strive to build wealth in low-risk markets and protect it in riskier climates. Rather than ride the waves of volatility in up and down markets we construct and manage portfolios based on the overall risk and health of the market.

Our philosophy involves using a tactical asset allocation combined with a dynamic asset allocation strategy. We use tactical deviations from the norm in order to capitalize on exceptional investment opportunities. This flexibility adds a component of trend following to the portfolio, allowing us to participate in economic conditions that are more favorable for one asset class than for others. In addition, we use dynamic methods to constantly adjust the mix of assets as markets rise and fall and the economy strengthens and weakens. Our tactical asset allocation is a dynamic strategy that allows us to actively adjust a portfolio’s strategic asset allocation based on market forecasts.

We sell assets that are declining and purchase assets that are increasing, taking full advantage of market direction.

Our strategy attempts to add value by overweighting those asset classes or sub asset classes that are expected to outperform on a relative basis and underweighting those expected to underperform.

Our investment process combines a rigorous techno-fundamental analysis with quantitative disciplines to direct a strategy for tilting the risk profile of client portfolios higher or lower as market conditions change over time.