Give yourself some options.
At Whitestone, we believe the greatest piece of advice on managing capital came from the late Kenny Rogers. He sang, “You’ve got to know when to hold ‘em, know when to fold ‘em, know when to walk away, and know when to run”.
Institutional investors, with their billions of dollars, follow this advice.
However, those same institutions have convinced retail investors to just sit on the sidelines and watch. That includes allowing your accounts to take 20, 30, and even 50% losses.
Institutions refuse to sit, watch, and do nothing. We believe you shouldn’t either.
A hands on, actively managed approach
At Whitestone, we don’t become obsessed with any particular brand of funds or ETFs. Instead, our focus is when to buy them and when to sell them.
We’ve all heard the saying that "a rising tide raises all ships" but we also know the opposite to be true. Simply put, we watch for the tide of money flowing in and out of virtually all types of equities and fixed income markets, and adjust our client accounts in an attempt to maximize gains and minimize losses.
Managing risk is always the focus
We follow larger trends of the world’s most popular benchmarks, including the Standard & Poor’s 500 Composite Index. Our strategy is to buy Exchange Traded Funds into markets when the benchmarks rise, and sell some or all of them when the benchmarks trend down. When a client is not invested during a downturn, the account is in cash or cash equivalents. Sounds simple, but it is very technical, and impossible to do so with 100% accuracy.
WCM is not a day trader who might buy and sell a stock minute by minute. There could be weeks without a single trade, and then we may choose to place three or four trades in one week. There is no set schedule as it completely depends on how and when the markets move.
Modern times demand modern solutions
A great many financial advisors adhere to “Modern Portfolio Theory” (MPT) to design client investment portfolios. However, MPT isn’t very modern anymore, it was created back in 1952. That was well before personal computers, the internet, cellphone trading apps, and more importantly, high-speed trading algorithms. If we’ve learned anything since the turn of this century, we believe using such “old-school” asset allocation techniques simply cannot keep up in today’s fast paced, highly correlated markets.
At Whitestone, we focus on a high tech, real-time approach to designing, diversifying, and adjusting portfolios to reflect current market conditions. One
thing we know for sure is this: Market conditions are always changing, sometimes at lightning speed.