Our Outlook
We believe markets alternate between lengthy “Bull” and “Range-Bound” periods, and that we are in a Range-Bound market now. Such markets can go up and down for years with no real progress. 1962 – 1980 was such a market: the S&P 500 started and ended at the same level. Your only return was from dividends. It is possible to make money in such a market with the right approach, but simple buy and hold will not work as you’ll just follow the market up and down. Rather, we believe capital preservation and dividends form the basis of good returns in range-Bound markets.
Our Approach
We believe it is possible to have relatively good performance in a range-bound market with a flexible, fundamentally sound methodology. Here’s how:
- Avoid large drawdowns;
- Earn high dividends;
- Emphasize undervalued equities;
- Buy large cap, dividend paying, low debt stocks and funds;
- Keep bond durations relatively short;
- Utilize alternative investments;
- Always be looking for special opportunities;
- Use cash strategically.
These are the principles we use to design your portfolio.