The ETF Store

investment philosophy

We believe that investors should focus on both preservation of wealth and growth of that wealth over time.  We believe the best investment philosophy to achieve those dual objectives is relative strength investing. By investing in the best performing asset classes and avoiding the worst performing asset classes, investors will participate in positive market environments while turning defensive in negative market environments. By buying the best performing markets and asset classes, relative strength investing will move your portfolio into emerging areas of growth while keeping your portfolio out of areas of weakness. In investing, it is not only what you own but also what you do not own that determines your investment success. In turbulent and volatile markets, this ability to adapt is an important risk control feature that protects your portfolio in declining markets. We believe that relative strength investing is superior to buy and hold investing or, as we call it, buy and hope investing.

The underlying philosophy for our relative strength investment strategy is that prices of global assets exhibit trends. This anomaly has been researched and proven in a numerous studies, both in the academic community and the asset management community. The momentum anomaly has persisted for hundreds of years and has its roots in a number of human biases such as confirmation bias, anchoring, overconfidence, loss aversion and conservatism.

We believe in diversification. By forcing a level of diversification on our portfolios, we control the level of risk for each individual investor’s comfort level.  Our primary investment portfolio is our Global Allocation portfolio which is offered in several combinations depending on client risk preferences and can be customized. This portfolio is the combination of two investment strategies, Global Foundation and Global Dynamic. We combine the two investment strategies to achieve an additional level of diversification for each client portfolio and to help manage the level of risk in each portfolio. Global Allocation is designed to be the core of a client’s overall investment portfolio.

Relative strength investing is similar to selecting athletes for an Olympic team. The athletes you would want to choose would be those that are the fastest, strongest, most talented right now. You would probably not choose athletes that had played well in the past but were not playing well right now – this would be a more fundamental or value-oriented approach. You also would probably not just stick with the same athletes on the team from four years ago – this would be akin to a buy and hold approach. We know that if we were picking the Olympic team, we would choose those athletes in each sport that were performing the best, right now.