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

Major domestic equity indexes reached all-time highs during Q3, while international equities managed to overtake their short-term moving averages after a mid-year sell-off. Despite renewed selling pressures at the start of Q4, for now our momentum dial continues to be in the “fully on” position.

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Fundamental Economic

Fundamental Economic

As of October 1st, the Atlanta Fed’s “GDPNow” model predicts that US GDP grew at a 4.1% real annual rate during Q3, which would represent the second consecutive quarter of GDP growth above 4%. Despite the IMF’s recent decision to cut its forecast for global growth in 2018 and 2019 from +3.9% to +3.7%, all signs indicate that the rest of the world is experiencing a healthy growth rate alongside the US. In sum, economic fundamentals are strong enough to have us in a “fully on” position for this dial.

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Market Valuation

Market Valuation

US stock valuations remain stretched such that this represents the second most expensive market in US history by some measures. International valuations range anywhere from “fair” in parts of developed Europe and Asia to “downright cheap” in certain emerging markets with high growth potential. On balance, our valuation dial remains in the “fully off” position.

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