Our Approach

INVESTMENT PHILOSOPHY

The marketplace can be difficult to navigate. Anyone who has lived through the tech wreck in 2001 or the 2008 financial crisis knows that the ride can be bumpy along the way.

We developed a principled investment philosophy that guides our decisions to mitigate the risk of losses in the short-term, while producing competitive returns over the long-term. We identified three primary indicators that work in tandem to provide a heartbeat for the market.

Our investment philosophy is known as the Three Dials.

THREE DIALS

Momentum/Sentiment

Momentum/Sentiment

With double-digit year-to-date gains for global stocks and new all-time highs for the S&P 500 and the Dow Jones Industrial Average, a buying appetite has certainly returned to equity markets through the end of June. Our Momentum Dial sat in a “Neutral” position at the end of Q1, as investors were still licking their wounds from last year’s losses, but continued strength through the end of this quarter has lifted our Momentum reading to “Positive” for the time being.

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Fundamental Economic

Fundamental Economic

The University of Michigan Consumer Sentiment index reached a 15-year high in May, a sign that economic activity should remain strong in the near-term. Meanwhile, declining borrowing rates should serve to support the housing market. While the ebb and flow of trade talks can cause monthly fluctuations in the data, economic indicators on the whole continue to point towards growth, and as such our Fundamental Dial remains in a “Positive” position.

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Market Valuation

Market Valuation

Cyclically adjusted price-to-earnings ratios indicate rich valuations for stocks today compared to their historical norms. Late in an economic cycle, we would prefer to buy assets that appear attractively priced, rather than overpaying for risk in an effort to squeeze every ounce of return out of an aging bull market. As such, our Valuation Dial remains in a “Negative” position.

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