Tactical Strategies

The most important principal of investing is to preserve your capital.

We can be as sure of market cycles as we are of seasonal cycles in nature. However, a large proportion of the investing public will be unduly swayed by these cycles by allowing their emotions to guide their investment decisions. For the most part, human beings are emotional beings, not rational beings. We are driven by the desire for gain (greed) and the apprehension of loss (fear). As a result, we see time and time again a statistically significant proportion of the investing public will buy high and sell low. Our strategic and proprietary tactical strategies will help you to stay off the loosing treadmill, monopolize the cyclical nature of the markets and preserve capital in down markets.

One example of our Tactical Strategies is our Cash Cushion Strategy™. The principal here is to strategically ensure that, in retirement, you spend two to three year old money. By that we mean, with the aid of our powerful financial planning software, we calculate each clients’s cash flow requirements for the next two to three years. If the funds are to come from one’s investments over that period of time then we recommend keeping cash flow required in a near-cash instrument (e.g. money market) and draw income from here. At the end of each year we assess if the stock markets have gone up or down. If the market has gone up, then we replenish the money market account from the stock portfolio. If the stock market have gone down, then draw on the money market account for another year. The reason for the two to three year period is that this is typically how long it takes for the stock market to recover from a major down turn.

Another example of our Tactical Strategies is our Market Cycle Strategy™. This strategy involves the use of leading market indicators to adjust the portfolio asset allocation in an effort to lock in profits and minimize losses.