trusting the process
In all cases, your first priority regarding investing in the stock market should be to make a profit while not taking on an inordinate amount of risk.
Simply put, you want to make consistent profits in the stock market and avoid making consistent losses. You want an equity manager that understands your objective and one that can clearly articulate exactly how he plans to achieve your stock market investment goals.
Most people I talk with desire reasonable returns on their investments as long as the risk of loss is not overly high. In all cases, the hope of every one of my clients is that I will grow their nest-egg in both bull and bear markets; and, perhaps even more importantly, not let them suffer the massive losses that can occur in a bear market.
Let me tell you a personal story about investing and trusting a money manager…
In the first half of my professional career, I built a company that became one of the world’s leaders in the development of enterprise-level software systems for the medical research industry. I built the company from scratch and after nearly 20 years, I was able to sell it and retire. I had built up a decent retirement nest-egg, but it wasn’t nearly as big as I wanted it to be. So, I did the prudent thing (I thought)… I gave my nest-egg to one of the big investment firms and told them to make it grow.
Three years later, my not-so-big retirement nest egg 'grew' to less than half its original size! And, unfortunately, I was no longer retired.
My biggest mistake was waiting three years to fire the big financial firm. But, finally too late, that is exactly what I did. You see, I was naive enough to actually think that the equity manager (a friend of mine, by the way) was actually looking after my money. I came to realize that the money manager was really nothing more than a salesman whose primary job was to increase his AUM (Assets Under Management). He did not, as I learned, actually manage my account. He never personally purchased a single share of stock or equity of any kind. What he did was to place my money with multiple mutual funds that were managed by companies and figurehead managers. In other words, no one was actually looking after my personal nest-egg on a daily basis. My money was just thrown in with millions of dollars from other unsuspecting individuals. When I would go to my friend's office to go over my quarterly report that kept getting worse and worse; all I would hear was how well the funds I was in "beat their Lipper average". My friend never took any responsibility for the losses. He would merely tell me that I should continue to stay on his plan "for the long haul." After firing him, I decided to never again trust my family's assets to a manager that was not directly involved in the day-to-day management of my assets.
But, I went one big step further. I decided to get educated and licensed in the world of professional money management. Once I had proven to myself, with my own money, that I could generate consistent profits in the stock market by being an independent, hands-on, portfolio manager, I could do the same for other individual investors. I could offer them the kind of money management that I thought I was getting when I first hired my money manager friend.
So, in 1998, I took over my financial investments. Being an engineer and steeped in computer software design and development, I knew I needed a good set of computer-based rules and investment methodologies. I not only began building those rules, I began trading with those rules.
My computer software system has evolved into a massive quant-based set of algorithms that currently has more than 2.8 million lines of code. I have refined my investment methodology to include both a macro and micro analysis process that has proven to be extremely successful and profitable for my clients.
In addition to providing my clients with real, hands-on, trade-level decision making for their accounts, I also believe in letting my clients know exactly what my investment strategy is and exactly how I go about making stock investment decisions. I do not believe in keeping my clients in the dark about any trade decision I make on their behalf. Unlike my experience with my friend, the "expert money manager", who could never tell me how or why my money was actually being used to buy or sell financial instruments, my approach is an open book. I enjoy explaining exactly how I go about making decisions on equity buy/sell decisions. I even provide my clients with the key quant-based output of my computer programs so that they can see precisely how and when the market triggers a change in strategy from bull-biased to neutral-biased to bear-biased.
While other asset managers want to make their clients think that their "proprietary decision-making" is all mysterious and so sophisticated that most people wouldn't even understand the process if explained to them; we, on the other hand, are not the least bit worried that our clients will know exactly how we manage their money for them, and exactly why we make the types of trading decisions that we use to grow their portfolio.
I happen to believe that we are somewhat unique in the world of private wealth portfolio management. I didn't come from the world of finance. I come from the world of math, computer science and engineering. I don't ascribe to the assumption that if you are really good at what you do, you have to hide how you do it from the rest of the world, including your own clients. For example, most money managers will tell you that their approach to managing your portfolio in a bear market is to 1) "Hang on for the long haul as the market will eventually come back." or 2) They will 'try' to outperform the market, including bear markets. Keep in mind that if the market drops 50% like it did in 2002 and 2008, and your portfolio drops 40%; the outperform-money managers can brag about how they beat the market by 10%. Never mind the fact that your portfolio lost 40% of its value and that it will probably take you more than 5 years to recover... perhaps much more than 5 years. In my opinion, losing less than the market loses is not always a sufficiently good investment strategy.
Both of these asset manager positional statements are flawed and do a disservice to their clients. Unlike these AUM marketing managers, we have a bull-market strategy; a neutral-market strategy; and, a bear-market strategy. We do not use the flawed 'invest for the long haul strategy'. We do not use the flawed buy-and-hold strategy. You should expect us to generate a profit for you in a bull market; move you to cash in a neutral market and generate a profit for you in a bear market. That's right... a "profit" in a bear market.
If you hire Turner Capital Investments as one of your money managers, you will find our approach both refreshingly honest and open. Our approach is to put your money to work with an investment strategy that is in sync with the market. Our computer analysis algorithms constantly review the macro trends of the market and provide us with a clear understanding of the "Market Bias". The Market Bias can exist in only one of three possible conditions: Bull-Biased, Neutral-Biased or Bear-Biased. As a client of ours, you will have access to this information as it is updated continuously throughout each trading day. As long as the Market Bias is above the "Neutral Zone" and depending on which portfolio strategy you are wanting us to follow with your capital, we will have you invested in fundamentally strong stocks that are technically trending higher. When the Market Bias drops into and closes for the week inside the Neutral Zone, we will begin a methodical process of moving your account to cash. When the Market Bias drops below the Neutral Zone, we will have you invested in highly liquid, broad-market inverse ETFs that move up in price as the markets move lower.
Again... you will be able to see exactly which strategy is in play at all times and why. I also write a weekly overview of the market including a commentary on current stock-market related events. This report is posted on this website and only available to my clients.
So here is the bottom line: If you are looking for a portfolio manager that actually makes every trading decision in your account; a manager that has a profit-producing plan for both bull and bear markets; a manager who tells you exactly how and why he makes every trading decision; and, a manager who has an open-door policy to every client... then we are the asset management team you have been looking for. I tell all new clients to start small with us just to learn how all of this works and take some time to get to know us. Then, when you are ready, you can add to your account as you deem appropriate.
We promise to look after your money just like it was our own personal nest-egg.