An array of investment strategies

Our Beliefs

• Buy & Hold DOES NOT work
• Stocks/markets/assets go through bullish (rising) periods, which are followed by bearish (falling) periods – extract profits regularly
• Holding equities in a bear market/downtrend is akin to financial suicide
• Small losses are preferred to big losses
• ANYTHING is possible

Our Methods

Trend Following

In the world of finance, there exists an investment strategy that has stood the test of time – trend following. This systematic approach aims to capitalize on price trends in various markets, be it stocks, bonds, commodities, or currencies. The beauty of trend following lies in its simplicity; it doesn’t rely on understanding why a market is trending, but instead focuses on profiting from the trend itself.

Source: Stan Weinstein

The performance of trend following during turbulent times further highlights its potential. It has shown positive long-term returns and profitability during periods like the Global Financial Crisis (’07-’08) and the Dotcom Bubble Burst (’00-’02). This ability to perform well even in challenging economic conditions makes trend following an attractive option for those seeking stability in their investment portfolios.

Source: Optuma

Breakouts

Breakout investing is a strategy centered around identifying key moments when a stock, commodity, or any other financial instrument breaks through a significant level of support or resistance. Support refers to a price level where the asset has historically tended to stop falling, while resistance represents a level where the asset has struggled to move past.

When a breakout occurs, especially on significant volume, it indicates a potential shift in the market's sentiment and momentum. Demand suddenly overwhelms supply (or vice versa). These breakouts can lead to substantial price movements, creating an opportunity to profit from the surge in either the upward or downward direction, depending on the breakout type.

Source: Stockcharts

Relative Strength

At its core, relative strength compares the performance of one investment asset against another or against an index. It provides valuable insights into the strength and/or weakness of different assets, sectors, or even entire markets. The key to understanding relative strength lies in comparing the price movements of assets over a specific period, often using technical analysis.

The primary objective of employing relative strength is to identify assets that are outperforming an alternative investment. Investors seek these assets as they could be potential winners with higher growth prospects and potentially less downside risk. This relative outperformance indicates that the asset is gaining strength compared to others, hence the name "relative strength."

One popular way to use relative strength is by constructing a relative strength chart. By plotting the price of one asset against another, investors can visually assess which one is performing more strongly – i.e., is investment A better than investment B? This helps investors identify trends and make more informed decisions when selecting investments for their portfolios.

Source: Optuma

Momentum

In the fast-paced world of investing, seasoned investors and financial analysts often speak of a mysterious force that can propel stocks to new heights and create lucrative opportunities. This phenomenon is known as momentum, and it plays a significant role in shaping the trajectory of investments. Understanding momentum is crucial for investors seeking to make informed decisions and harness the potential for substantial returns.

In physics, momentum refers to the force that keeps an object in motion. Newton’s Law states that an object in motion stays in motion, unless acted on by an unbalanced force. Similarly, in the financial realm, momentum in investing describes the tendency of an asset's price to persist in the same direction over time. Put simply, assets that have performed well in the recent past are likely to continue performing well, while those that have underperformed tend to keep struggling.

Source: Optuma

These are just a few of the tools in our investor toolkit, and none of them are used in isolation. Market conditions, fundamental analysis and many other indicators all play an important role when making decisions with our capital.