We Believe You Can Have Your Cake and Eat It Too!
Investment markets are not predictable. However, markets do follow "trends" that are fairly easy to determine. Following trends does not require us to become predictive. We are not required to predict interest rates, guess which asset classes to include in a portfolio or rely on past performance as a guide for the future. You have likely read that past performance has no bearing on future results. That statement is true!
So, why do advisors attempt to make predictions? Because that is the formula they were taught to follow. Making such predictions is a form of mental blindness. And we all know that one blind person leading another blind person will eventually result in both falling into a pit.
We have chosen a different approach. By watching trends, investors and advisors have a means to know when to:
- Stay away from risky investments -- (In this condition, cash is King! where trends show limited potential reward for bold risk-taking)
- Take a measure of equity risk -- (Trends suggest the odds for reward are somewhat greater than risk of losses)
- Increase exposure to risk -- (Trends suggest risk of losses appear more remote than the reward of gains)
- Go all in with equity risk -- (Trends support an old adage, "back up the truck and unload")
We consider this a "tactical" approach to investing. Tactical comes from nautical language and means we capture the prevailing "investment winds." Our tactical approach means we have no fixed percentages in any investment, we have no fixed holding period, we do not care how markets performed in the past (past is 100% irrelevant), we follow trends, and attempt not to lose money. Thus, we seek to limit losses by following trends that tell us currently how investment markets are behaving rather than predicting what the market may or may not do.
No one can predict what investment markets will do! But we can capture current trends and adjust our risk exposure accordingly. If this sounds reasonable to you, please contact us at your convenience. We enjoy meeting new people.