Technical Analysis & Discipline

Our ever present defensive investment strategy is rooted in technical analysis.  Simply put, our decisions of how much risk to take in the client portfolios is based upon the overall trends of the market.  Our proprietary model takes numerous factors into consideration such as the short, intermediate, and long term trends, volume of the market's transactions, momentum of the market, volatility of the market, and the percentage the market has deviated from it's high or low point.  The bottom line is that our system creates a moving stop loss, so to speak.  When the market and our clients' accounts are beginning to decline and risks are rising (on a long-term basis), we tend to systematically reduce exposure to higher risk equities.  If the weakness persists, we further reduce risk and exposure.  The result of this practice, although not perfect, is normally a significant reduction in impact of the declining market.  Eventually, the markets tend to recover and the process is reversed so that we can capture as much as possible of the rising market trend.  As you can imagine, this process tends to smooth out the volatility for our clients, making the investment journey a little more comfortable.  We have always believed the trick to investment success is to lose less in the challenging times.

As our firm name indicates, we are all about having a strategy with regard to everything we do.  We see a lot of individual investors who buy stocks or bonds with no clue as to when or how they will sell in the event of turmoil.  The same goes for when they sell out of the market due to fear, they have no plan for when they will re-enter.  We believe it is imperative to have a definitive and disciplined plan on when to buy and sell each and every investment.  Furthermore, it is critical to remove emotions from affecting the disciplined strategy.  It is nice that we all have instant access to the news around the world but, unfortunately, it can work on one's psyche, causing an investor to be overly fearful or exuberant about their investments.  This normally leads to bad decision making.  We can tell you from experience that there have been many times we have executed trades, based upon the discipline of our strategy, which did not emotionally feel good at all.  Most often, the discipline proves to be correct, improving the bottom line for our clients.