Overview

Solutions for Tomorrow
We construct strategies to address the shifts in the market that we see ahead, not try to solve yesterday’s troubles.


Understanding the past…
When Harry Markowitz first proposed Modern Portfolio Theory (MPT) way back in 1952, he believed that non-correlated positions could be combined at varying weightings to reduce risk. Each position within the portfolio was viewed as part of the overall whole strategy. This led to the popularity of the pie chart that is now ubiquitous when looking at portfolios.

However, times have changed drastically since 1952. Trades can be placed using device in our pockets without having to write a letter or call a broker like back in the 1950s. While some of the elements of Markowitz theory still apply, for one viewing clients as risk adverse, many things have changed. Assets that were once non-correlated have become remarkably correlated in the recent market crashes since 2000.

Today, passive MPT investing is like trying to drive a car by looking through the rear view mirror. It only works as long as the market doesn’t throw a curve.

Past performance doesn’t guarantee future results…
You’ve seen this time and time again. Yet, past performance is often used as the determining factor by other advisors in selecting the types of securities; specific stocks, funds and ETFs; the weightings of each position; and the overall blend of the portfolio.

Looking to the Future…
We think differently. We look forward. Since history informs the future and doesn’t guarantee it, each portfolio needs to be constructed based upon a forward looking methodology. Just because a position was the top performer one month, one quarter, one year, it doesn’t mean that it will be the best performer the next month, quarter or year.


To that end, we generally view each position independently. We don’t over-weight or under-weight based on the specific asset class. Instead we give each position equal opportunity to outperform the others. This removes the historical bias that may over-weight an asset class that may underperform one year while simultaneously under-weights an asset class that may be the best performer.

Market
RIA
Member Level
Chalice
Last Activity
6 months or more
Listing Age
501 days old

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