Our Investment Process

“Risk is not a one-dimensional problem cured by a single act of diversification.

The reality is that too many investment strategies that financial advisors employ are a pie chart of investments. The hope is that through limiting exposure to any single asset (or asset class) your overall portfolio will not participate fully in any downturn that asset experiences. The reality, which we saw in the financial crisis of 2008, is that many asset classes can go down at the same time.

On the other hand, we follow what is called polymorphic momentum. In its simplest form, that means we look at various assets (asset classes, positions, etc.) from lots of different angles. We compare the data involved in that holding in lots of different ways. We believe that allows us to see if it really is the best option that we can see for your money, right now.

We employ a strict, dynamic sell discipline during periods of heightened market volatility. Our investment discipline adheres to multiple risk reduction measures and rules-based order techniques to manage positions for what we believe to be a better risk-to-reward overall. While no approach yields 100% accurate results, our approach strives to outperform over time.

We believe in the laws of compounding wealth. We emphasize the principle of minimizing losses in a down market cycle or "drawdown" using hedging strategies to make it possible to compound wealth during the growth cycles. This is best measured over multiple market cycles where patience and focused strategies help ensure long-term goal achievement.

Our strategies hold more cash equivalents as a "protective" asset class during periods of heightened volatility and, to some extent, during market consolidation. We seek to emphasize dividend and interest reinvestment plans and to mitigate low cash yields that negative and trendless periods can produce by holding more significant amounts of cash equivalents.

We strive for market-type returns over the long term tempered with reduced "beta" or risk exposure, using cash equivalents, fixed accounts, and short-term bonds as asset classes to balance risk versus reward during heightened volatility. Our tactical approach to investing is designed to target approximately 2/3rds of the up cycles on average and avoid 2/3rds of the downside risk. We are not striving to get to the bottom or the top of the cycle.