Our Approach

INVESTMENT PHILOSOPHY

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.

THREE DIALS

Momentum/Sentiment

Current Reading

Positive

Despite selloffs of varying degrees, the major global equity indexes have held firm above their long-term moving averages, a sign that an upward trending market remains intact. The MSCI Emerging Markets Index, which suffered the biggest losses in January, still shows a gain of +2.3% over the past three months. Investors seem confident that the coronavirus fallout will be well contained, which leaves our Sentiment Dial in a “Positive” position for the time being.

Economic Fundamentals

Current Reading

Positive

Global manufacturing reached a nine-month high in January, according to the JPMorgan Global Manufacturing PMI, a good sign in what was the weakest area of global growth in 2019. Meanwhile, the Atlanta Fed GDPNow estimates +2.9% growth for Q1 GDP, an increase from the +2.1% advance estimate of 2019 Q4 GDP. All things considered, strong economic datapoints result in a “Positive” reading out of our Fundamental Dial.

Market Valuation

Current Reading

Negative

Valuation remains a concern, as global cyclically adjusted price-to-earnings ratios continue to creep toward historically high levels. Given the high prices for equities compared to the potential risks on the horizon, our Valuation Dial sits in a “Negative” position.

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