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

2019 has seen stock markets largely shrugging off negative narratives in the pursuit of new all-time highs, with the blue-chip US-listed names leading the way. Given that the major equity indexes, both at home and abroad, have at least found support levels well above the lows seen in 2018, our Momentum Dial remains in a “Positive” position through the end of Q3.

Economic Fundamentals

Current Reading

Positive

The Institute for Supply Management’s manufacturing index posted its lowest reading in September since the Great Recession, leading to much handwringing over when the next recession might be upon us. That said, an equivalent manufacturing index published by IHM Markit hit a 5-month high in August, well above contractionary levels, suggesting conflicting reports about the state of the manufacturing industry. While continued uncertainty around the China trade war is certainly sending negative shockwaves through parts of the economy, it is also the case that unemployment continues to fall, financial conditions remain accommodative, and leading economic indictors on the whole are strong enough to keep our Fundamental Dial in a “Positive” reading.

Market Valuation

Current Reading

Negative

Valuation remains a concern from our end. Though a simple price-to-earnings ratio appears to be within historical norms, elevated profit margins indicate that earnings may be stretched beyond what is sustainable. As such, our Valuation Dial remains in a “Negative” position.

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