The Barometer Investment Strategy incorporates two major components:

1. Our Stock and Bond Barometers, to objectively gauge the current economic and market environments relative to the outlook for these two investment classes.
2. A portfolio management process to enable dynamic allocation changes between asset classes using easy, step-by-step decisions.

This approach incorporates a risk management strategy that tilts the portfolio toward the asset class with superior expected returns, while underweighting the asset class that is vulnerable to low returns and potential losses. More specifically, all investment recommendations are based on a cutoff criterion that has historically limited the incidence of losses to less than half that experienced by a traditional buy-and-hold stock strategy. The result is attractive returns at a comfortable level of risk.

The portfolio management process systematically moves investments between asset classes as economic conditions evolve, also known as dynamic asset allocation. The investment vehicles are widely diversified index funds, and only one decision is required per month – impacting less than 10% of the entire portfolio. The resulting process is easy to implement without the need for frequent market monitoring or hand-wringing, gut-wrenching decisions. Our investors say this systematic approach significantly reduces the emotion and anxiety involved in managing their portfolios.

Our strategy presentation includes narrative notes to discuss and explain each exhibit in greater detail, similar to the commentary that is given when the presentation is made in person. Please click on the button below to view this presentation in PDF format.

Investment Strategy