INVESTMENT DISCIPLINES

Our number one priority is to attempt to keep clients out of trouble.

Outcomes Delivered by Discipline

We believe there are three questions every money manager should be able to answer: “When do you buy?”, “What do you buy?”, and “When do you sell?” For us, the answers to those questions form a tactical, rules-based, decision framework for the construction and management of portfolios that has served investors for more than 35 years.
Our Investment Process


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Our Disciplined Process

When to Buy
When To Buy
Trend Following
  • We evaluate buying opportunities when our quantitative decision rules identify an uptrend in the price of a security.
  • An uptrend is determined by a security’s price rising above both the recent low of its upper band and a secondary moving average.
  • A security’s bands are related to its historic volatility and are offset above and below a short-term exponential moving average.
What to Buy
What To Buy
Security Selection
  • We seek to buy securities exhibiting strong risk-adjusted returns during a recent uptrend.
  • Additional metrics, such as strength of the recent uptrend, historical volatility, and correlation to existing holdings, are considered in portfolio construction.
  • If there are multiple securities with buy signals in the same asset class, preference is towards buying securities with better, recent risk-adjusted performance.
  • For multi-asset-class portfolios, if there are a number of securities with buy signals across different asset classes, risk and diversification are also considered, with the goal of preventing one asset class from having an outsized impact on the portfolio.
When to Sell
When To Sell
Trailing Stop Discipline
  • We will sell a security when our quantitative decision rules identify a downtrend in the price of a security.
  • A downtrend is determined by a security’s price falling below the recent high of its lower band – an event which triggers a sell signal.
  • Our Trailing Stop Discipline seeks to limit the impact of a further decline in value of a security on the overall portfolio.
  • Our Trailing Stop Discipline is applied across positions in each of our managed portfolios and monitored daily.
  • When a position is sold, we may keep the proceeds in cash or buy another security.

More About Buy & Sell Signals

Our quantitatively-based investment disciplines only invest when an uptrend has been established. We use exponential moving averages to help drive our decisions. An exponential moving average is a type of moving average that places a greater weight and significance on the most recent data points, and therefore, reacts more significantly to recent price changes compared to a simple moving average.
We create custom upper and lower bands for each eligible fund to help us identify when to buy or sell. The widths of the bands are related to the historic volatility of each fund and are set such that we would not anticipate more than two round trips per year. And we apply this rules-based discipline separately to each fund, rather than having a generic asset class-based signal.