Our Approach


The marketplace can be difficult to navigate. Anyone who has lived through the tech wreck in 2001 or the 2008 financial crisis knows that the ride can be bumpy along the way.

We developed a principled investment philosophy that guides our decisions to mitigate the risk of losses in the short-term, while producing competitive returns over the long-term. We identified three primary indicators: Momentum, Economic Fundamentals and Market Valuation. These indicators work in tandem to provide a heartbeat for the market.

Our investment philosophy is known as the Three Dials.



Current Reading


Despite choppy action from the S&P 500 that saw a second consecutive monthly decline of at least -8%, buyers continue to step in at support levels and sustain an upward trending market. The S&P suffered a -2.7% loss in October, though the index is still up +2.8% for the year, quite a feat considering the steep COVID-related selloff in February and March. Elsewhere, international equities fared slightly better for the month, falling -2.2% in October, though the MSCI ACWI ex-US index is still down -7.5% year-to-date. Of note is the performance within Emerging Markets, which gained +2.1% on the month and returned to positive territory for the year. On balance, equity markets are holding onto the uptrend that began with the March lows, which leaves our Momentum Dial in a Positive position.


Current Reading


Economic data continues to pick up in the U.S., with key areas such as employment, housing and manufacturing experiencing solid sustained growth over the past five months. Given the current base case for continued fiscal stimulus, the domestic economy is on far firmer footing than it was at the end of Q1. However, with record numbers of Americans still unemployed and the overhanging threat of a potential COVID resurgence and related shutdowns, we are not fully out of the woods just yet. As a result, our Fundamental Dial has ticked up from Negative to Neutral.


Current Reading


While Q3 earnings in the US have been largely surprising to the upside, we still see a valuation problem, with price-to-earnings ratios sitting well above their short and long-term averages. While there is a chance that stocks grow into their lofty valuations, this scenario creates an equally dangerous risk to the downside. As such, our Momentum Dial continues to show a Negative reading.
On balance, our Three Dials composite reading has ticked up one notch from last month, with equal amounts of optimism toward a brighter future and caution against the continued risks on the horizon.