turner capital investments model portfolio strategies
The Right Strategy for the Right Market at the Right Time
Trading decisions for all of our portfolios are made by Mike Turner, Turner Capital Investments President and Chief Trading Strategist. Each strategy utilizes our proprietary market and equity analysis algorithms, but each strategy has unique elements that impact the capital and risk objectives.
We utilize both a "top/down" and a "bottom/up" approach to managing client accounts. The top/down component of our approach is based on an analysis of the current condition of the overall market. The stock market, at any one time, can be categorized as having one of the following "Market Biases": bullish, neutral or bearish. Our analysis indicates that markets never move from a bullish bias to a bearish bias or a bearish bias to a bullish bias without moving into and through a neutral bias. Being able to change investment strategies to match the bias of the market is key to keeping client accounts in sync with the market and, thereby, taking advantage of each Market Bias with a commensurate investment strategy.
The bottom/up component of our investment approach is based on a quantitative analysis of individual equities, including both a fundamental and a technical assessment. We have developed a proprietary quant-based computerized market and equity analysis program that assesses the current market bias and also buy/sell recommendations for individual equities based on both fundamentals and technicals. Our computer models and analysis algorithms are sophisticated and complex. The current iteration of our software is comprised of well over 2.8 million lines of code and provides us with a unique level of insight into stocks, ETFs and Indexes.
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In general, our portfolio investment strategies have some strong similarities, including our use of the Turner Capital proprietary analytical software systems for equity selection, the way we track the condition of the market through our "Market Bias" analysis and the way equities are scored, rated and ranked on both a fundamental and technical perspective.
But, the differences among the strategies are significant.
- The Blue-Chip Growth Strategy (Start Date: November 1, 2014) is intended to be a conservative investment strategy that focuses on fundamentally strong, up-trending stocks in bull markets; raises cash in neutral markets; and, holds cash and inverse ETFs in bear markets.
- The Growth & Income Strategy (Start Date: October 25, 2015) is highly focused on strong dividend paying stocks that have a long-term track record of paying consistent and/or increasing dividends.
- The Aggressive Growth strategy (Start Date: January 1, 2016) is intended to be fully in the market when the market bias is bullish or bearish. It is by far the most opportunistic and takes on the highest amount of risk.
- The Market-Directional Index strategy (Start Date: April 1, 2016) follows the S&P 500 via the SPY ETF. When the market is bullish, the strategy holds long positions in the SPY. When the market is bearish, the strategy holds short positions in the SPY. In neutral markets, the strategy moves to cash. For IRA accounts, instead of shorting the SPY in bear markets, the strategy holds positions in the SH, the inverse of the SPY.
- The Global Rotation ETF Strategy (Start Date: January 1, 2017) holds only Exchange Traded Funds, each of which track a very specific global market segment. Areas of focus are US indexes, US Sectors, major Commodities (gold, silver, oil, etc.), Emerging Markets, major Developed Markets, Currencies, Bonds, Large Cap, Mid-Cap, Small Cap with both US and ex-US holdings, and as needed, inverse ETFs. The objective is to remain fully invested in most markets and rotate funds from weakening markets into expanding markets as the bull/neutral/bear trends of each ETF dictate.
- The Covered Call Strategy (Start Date: January 1, 2017) is a portfolio completely composed of equities that are considered attractive for selling calls against. The objective is to invest in equities that have upside pricing growth potential, hopefully pays attractive dividends, and has call options that are attractively prices. The bull-biased strategy is to sell out-of-the-money calls with near-term expiration dates. The goal is to hold the equity and let the call expire worthless. This generates income for the portfolio if the equity moves up in price, stays flat or moves down in price less than the income generated from the sale of the call. If the call is exercised, the equity is called away at a higher price, plus we keep the income from the sale of the call. In neutral markets, the strategy tends to move toward holding cash. In bear markets, the strategy holds cash (generally more than 70%) and inverse ETFs, of which calls will be sold against these holdings when available.
Below is a table of the various elements of each portfolio strategy and the commonality of these elements among the strategies:
|Profile of the Turner Capital Investment Strategies|
|Income plus Conservative Growth|
|Higher Risk Aggressive Growth|
|Utilizes Rules-Based Fundamental Analysis|
|Utilizes Rules-Based Technical Analysis|
|No more than 30% invested in any one Sector and no more than 20% in any one Industry|
|Minimum Account Size|
|Account Types: cash, trusts, taxable IRAs, non-taxable IRAs|
|24/7 client access to account|
|Year-End Transaction Results Reporting for Tax Purposes|
|Free Subscription to Turner Trends Tools|
|In Bull Markets, strategy focuses on fundamentally strong, up-trending stocks|
|In Neutral Markets, strategy focuses on raising cash||
Secondary to Holding
Strong Dividend Paying
Back-Filling Open Positions
may be curtailed
|In Neutral Markets, strategy focuses on holding only those equities that have strong dividend yields and taking profits|
|In Bear Markets, strategy focuses on holding short positions in the SPY||
For IRA Accounts, the strategy utilizes the SH instead of shorting the SPY
|In Bear Markets, strategy focuses on holding cash and inverse ETFs|
|In Bear Markets, strategy focuses being fully invested in strong, up-trending stocks as contrarian plays and inverse ETFs|
|In Bear Markets, strategy focuses on holding cash and high yielding dividend stocks|
|Focuses on fundamentally strong, high-yield dividend stocks with history of increasing dividends|
|Relative Risk Comparison|
|Priority of Equity Selection: Fundamentals + Technicals + Sector Distribution + Industry Distribution||
Plus Dividend Strength
Minus Sector & Industry