A Disciplined Investment Process
Our disciplined investment process, grounded in the economic principles of supply and demand, actively manages the exposure between equities, bonds and cash as the probability of investment success rises and falls each individual invest held in the participants account via the model portfolio. In the April 2008 – June 2008 time frame our relative strength indicators saw “cash” rise to the number 1 relative strength ranked asset class, forcing us to significantly over-weight cash well before the events that triggered the resulting financial crisis in September 2008. Then in March 2009 as our primary market risk barometer the “NYSE BULLISH PERCENT” brought the offensive team back on the field, showing evidence that the balance between supply and demand was beginning to shift back towards demand, we once again looked to our asset class relative strength rankings to guide us back into the equity markets focusing on the appropriate asset classes. These emotionless barometers provide us with a game plan when things are going right in the market and maybe more importantly, when things are starting to go wrong.
We believe that no single sector or asset class is permanently superior, but rather sectors and asset classes rotate in and out of favor including cash, as the market environment changes. We aim to capture more of a market’s rally and miss the better part of those corrections that are so severe they can destroy a client’s portfolio. Our methodology is a logical, organized way of recording the supply and demand relationship in any investment …individual stocks, mutual funds, commodities, currencies and ETF’s. Unlike the buy-and-hold, strategic asset allocation process, ours is a highly disciplined rules-based process that takes the emotion out of making investment decisions.