Our investment model

Our asset management program employs a sophisticated investment model. This enables us to manage highly customized individual portfolios for each of our clients while simultaneously facilitating rapid response to overall market conditions.

By focusing on the management of a model, our portfolio managers can make minute by minute investment decisions based strictly on current market and economic conditions. When a change is necessary it is implemented in the model. Then we query our data base to determine which individual investors have that particular element of the model included in their personal portfolios.

It would be impossible for any portfolio manager to individually monitor each client portfolio on a minute by minute basis. Instead, we include within our model every investment which is contained in any of our clients' individual portfolios. In this way, we need only to focus on the model to make investment decisions.

Investment philosophy

Unlike most other firms, we do not subscribe to the tired old ideas of asset allocation and diversification. This is not to say that we believe that all of our assets should be invested in one place, but rather that assets should be placed in the most appropriate vehicles at any one time, based on current market and economic conditions.

The idea that your assets should continuously be divided into different categories generally doesn't make sense. Most of the time, there is only one area of our markets performing well, and that is the appropriate place to invest. By spreading assets across a large cross section of available investment vehicles, it is easy to claim that you are minimizing risk. However, the price for this is mediocre performance.

Indeed, spreading investable assets among many investment areas may be appropriate for individuals investing on their own. However, if you are paying a professional to manage your assets, you should expect something better than mediocre results.

The nuts and bolts

Once an investor joins the program, assets are transferred into our asset manager account. This account is non-discretionary, which means that every investment decision must be approved by you in advance.

You might wonder how it is possible to contact every one of our investors for each investment decision. First, not every investor has every piece of the model. Secondly, we use some very sophisticated technology to reach every investor in a timely way, when a decision is required.

Each decision with regard to the investment model is made in advance, with targets or decision points established for each individual investment. When we decide that a change is indicated, all affected investors are contacted in the following ways:

1. Each of our investors is provided with stock ticker application, which they may install in their computer at home and/or at work. This software delivers stock quotes and financial news directly to their desktop. More importantly, it delivers live urgent messages from us to our clients concerning recommended changes to their individual portfolios.
2. Automatic e-mail messages are sent out to each investor describing the condition that is occurring and the recommended action. The client may reply with his or her approval via e-mail or by phone.
3. An automated phone system calls each client, delivering voice mail describing the situation and requesting approval for the recommended action. The client may reply during the same phone call, electronically recording his or her decision, or he or she may choose to speak directly with an investment advisor.
4. If we fail to reach the investor with all of the electronic means above, then our staff will attempt to reach him or her personally.

Bear in mind that these are decisions made in anticipation of some future occurrence. Contingency plans are always agreed to in advance, so they may be acted upon in response to an event such as a major market correction.