Investment Management

Our investment process uses a combination of Strategic and Tactical asset allocation. Strategic asset allocation is used to provide diversification. Tactical asset allocation identifies long term trends, entry and exit points.

Developing your investment portfolio is a collaborative and interactive process.  There are three basic elements in this process:

Step 1: Establish Long-Term Investment Policy

An investment policy is a road map developed with you to guide the construction of your investment portfolio. This policy reflects two critical decisions: how much risk do you want to take and how much liquidity do you require? For example, low-risk portfolios may reflect a large allocation to fixed income; high risk could include more equities. Publicly traded stock and bond portfolios have a high degree of liquidity while hedge funds, private equity, and real estate have far less. I will collaborate with you to craft your personal investment policy based on a fundamental understanding of your goals, risk tolerance, and liquidity needs. These asset allocation guidelines are established and recorded to ensure your investment portfolio meets your expectations.

Step 2: Incorporate Tactical Investment Strategy

Tactical asset allocation* is used to adjust asset allocation in a timely manner. Tactical asset allocation is also used as a capital preservation strategy during long periods of market decline. Historical data indicates that during large declines in the financial markets diversification may not prevent large losses.

Our Tactical Allocation process starts with back tested quantitative computer models design to limited losses during declining market environments. The models are also designed to capture a significant portion of advancing markets. They have been back-tested to optimize returns.

Step 3: Implement Personal Investment Strategy

Based on your individual investment policy and the tactical investment strategy, I create a recommended portfolio allocation to different securities and managers, capturing the best overall allocation, keeping in mind all of your particular preferences.   In creating an optimal portfolio for you, I have an extensive list of choices to consult, including proprietary and non-proprietary stock and bond research.  By not being tied to any investment company or manager, I am able to give independent, unbiased advice on what investment is best without any conflict or personal interest.

Here is a summary of the process for creating the investment allocation and specific investments:

Determine the appropriate risk and timeframe for the portfolio. We use Monte Carlo analysis and efficient frontier theory to determine the appropriate risk.

Analyze markets to find asset and sector classes believed to be in a long-term uptrend. As Warren Buffett says, “Find a trend; throw yourself in front of it.”

Create portfolio using best-in-class investments that fit into these asset and sector classes. Without having any restrictions or biases towards certain investments, we are able to give a truly unbiased recommendation.

Utilizing quantitative analysis determine the best time to buy or sell these asset or sector classes. This allows us to reduce unnecessary risk and help stabilize returns over time.