Our investment philosophy reflects a long-term approach to investing and is influenced by our belief in the following principles:
Forward Looking, Independent Thinking
Our investment models can be enhanced by an accurate view of future market developments. Over the past 15 years, we have been quite accurate in identifying the major inflection points in the markets (see "Our Best Calls: Excerpts from ACM Publications"). We try to be thorough and thoughtful in developing our forward looking views. We are very comfortable making our own assessments of the investment landscape and, if need be, standing apart from "the crowd."
Active Portfolio Management
Portfolio performance can be enhanced by tactically adjusting exposure to different asset classes and investment styles within those asset classes. Academic research supports an approach which combines both valuation and trend based criteria to enhance returns and/or help manage risk within and across asset classes. Click on our Whitepaper Links to read some of the research papers and articles that influence our approach to portfolio construction.
Diversification should be an important aspect of a long-term investment plan. A diversified, multi-asset, approach can help manage the various risk factors affecting an investment portfolio. The resulting reduction in volatility allows for a longer-term adherence to an investment plan.
A key component of achieving superior, long-term investment returns is to avoid or mitigate losses. Unlike other firms, our managed portfolios seek to limit downside risk to defined levels first, and to maximize returns within those risk constraints second.
Expense and Tax Management
Investment related costs are one of the few things in the investment process that can be controlled and pre-determined. Over time, lower investment expenses can improve portfolio returns meaningfully. For taxable accounts, the tax consequences of an investment program are underappreciated. Using tax efficient investment vehicles and actively harvesting unrealized losses can meaningfully improve after-tax returns.