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

Q2 saw a bifurcation in sentiment between US stocks, where market participants seem ready to buy any dip and provide support at key levels, and international stocks, which have seen an interruption in momentum as of late. Despite the price breakdown of international equities, mutual fund investors continue to add funds to foreign stocks, a sign of sustained buying appetite. On balance, market sentiment and momentum remain positive, and this dial continues to be in the “fully on” position.

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Fundamental Economic

Fundamental Economic

Q2 US GDP appears to be on track for a real seasonally adjusted annual growth rate of around 4%. If that number holds, it would represent the strongest quarterly growth out of the domestic economy since 2014. Meanwhile, the US unemployment rate continues to hover around an 18-year low. Leading economic indicators are strong enough to have us in a “fully on” position for this dial.

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Market Valuation

Market Valuation

We continue to view equity valuations as stretched. By one measure (the Cyclically Adjusted Price-to-Earnings Ratio), US stocks are in the midst of one of the most expensive markets in history, behind only the internet bubble of the late 1990’s/early 2000’s. Therefore, this dial remains in the “fully off” position.

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