An investment philosophy honed over years

Through more than three decades in the industry, our team has developed a philosophy that provides a strong foundation for investment decision-making.

To start, we believe that investors should not take on any more risk than is needed to pursue their goals. Risk is multifaceted, and investors must plan for inflation and liquidity risks, among others. The clients’ best interest remains at the forefront.

These guiding principles were strengthened during the 2008 financial crisis. It was clear to us that separately managed accounts and mutual funds were not the best alternative for many types of investors. Our team needed to have more control in the risk level of the investments. To accomplish this goal, we began incorporating technical analysis along with fundamental analysis into portfolio construction.

We have six classes of assets to choose from: cash, fixed income, U.S. equities, international equity, commodities and currencies. Traditional asset allocation tells you to divide the asset classes like a pie and put a percent into each one to reduce risk. Real world experience tells us not to buy the asset classes that are out of favor, but only the ones that are strong both technically and fundamentally.

As we write this, we are in the middle of the COVID-19 pandemic. If you had used the traditional pie to allocate during this time, you would have owned the good, the bad and the ugly. With our technical analysis overlay, we try to avoid the bad and ugly sectors.

Our approach to investing is basic economics. We all understand the law of supply and demand. The same forces that affect prices in the grocery store also affect prices in the stock market. Stocks, sectors and asset classes move in and out of favor, just like produce in the grocery store.

Investment Fundamentals:

• Product acceptance
• Company management
• Earnings quality
• Price-to-earnings ratio
• What to buy

Investment Technicals:

• Internal strength
• Trend analysis
• Relative strength
• Momentum
• When to buy/sell

All investments are subject to risk, including loss. Asset allocation does not guarantee a profit nor protect against loss. The market value of fixed income securities may be affected by several risks including interest rate risk, default or credit risk, and liquidity risk. International investing involves additional risks such as currency fluctuations, differing financial accounting standards, and possible political and economic instability. These risks are greater in emerging markets. Companies engaged in business related to a specific sector are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification. Investments in commodities and currencies involve additional risks and are not suitable for all investors.