Our Wealth Management Offering
What Sets Us Apart
Rules, not emotion!
Patience, not panic
The Importance of an Effective Investment Process
Investing wisely is crucial, and having a structured investment process like the one we use cannot be emphasized enough. Most investors and their advisors follow Modern Portfolio Theory (MPT), introduced by Harry Markowitz in 1952. While revolutionary at its time, While revolutionary at it’s time, MPT’s principles promotes a “Buy and Hold” (and hope) strategy, suggesting that maintaining a diversified portfolio through all market conditions is optimal. However, this theory was based on assumptions of rational decision-making, limited information, and poor market opportunities—conditions that no longer hold true today.
The Drawbacks of Buy and Hold (and hope the market does well)
For example, had a client had an investment in the S&P500 prior to the market crash of 2001 it took 13 years to return to $100,000 and in 1929, $100,000 invested at the Dow Jones Industrial Average at its peak took 25 years to claw back to that $100,000.
Transition to Rules-Based Investing (RBI)
In 2009, Daryl Cooper shifted from the passive Buy and Hold (and hope) strategy to a proactive, tactical approach that removes emotion and human error in trying to time the market. Rules Based Investing (RBI) algorithms provide entry and exit points from asset classes. Once a sell signal is prompted, one exits that asset class such as the stock market and move to another asset class such as cash or bonds. This is a significant change in investment philosophy and one that less than 1% of advisors in North America adhere to. Exiting the global stock markets were triggered in 2000, 2008, 2016, 2020 and 2022. Once equities regain their strength relative to other classes a re-entry signal will be triggered, and you are back in the market again. It has nothing to do with market timing and everything to do with simply following the rules.
The Benefits of Rules-Based Investing
Since adopting RBI, we have managed money without guesswork or crystal balls by following strict rules, we rule out guessing and emotional decision-making. This approach not only ensures precision in our investment decisions but also holds us accountable to our clients, as we handle their investments directly without relying on third parties. Our investment philosophy provides clear signals for when to exit investments, embodying our motto: “Strategy Over Emotion: Rules-Based Investing.”
Conclusion
In the ever-changing world of finance, relying on outdated strategies like Buy and Hold may be risky and costly. Our commitment to Rules-Based Investing, combined with the latest technological advancements, offers a robust and reliable investment process. This ensures that our clients’ portfolios are monitored with the utmost precision and care, safeguarding their financial future.
