Approach to wealth management

I believe my approach is different from many other advisors for several reasons. First, I differentiate myself with a risk control overlay that, historically, has tapped into the psychology of the markets. The strategy recognizes that, for the majority of substantial market declines over the past three decades, global investors first get moderately apprehensive about stock market conditions before they get really apprehensive. I seek to lower exposure to equities when expectation of future market volatility and uncertainty (as represented by the VIX Index) has become sufficiently elevated to indicate heightened risk of market psychology eroding further. The strategy will be invested in stocks when I believe volatility is relatively contained, or alternatively, after volatility has spiked higher (taking equities down with it) and begun to settle down. The strategy strives to not be fully invested in equities when expected volatility moves from an elevated level to a highly-stressed level.

Of course, we can’t know when we lower exposure stocks if this is the beginning of a substantial decline. From my review of market history back to 1987, my assessment is that the potential to reduce exposure to substantial declines associated with a VIX Index spike could be more important to the risk-adjusted returns of a portfolio than the possible market upside potentially missed while temporarily reducing risk.

Finally, I do not bias selection toward companies domiciled in the country in which I happen to live. I believe that we are living in a unique time in world history, when billions of potential consumers are, for the first time, being inundated with internet images evidencing the materialistic lifestyle being enjoyed elsewhere, at the same time that they are being enabled to produce these goods and services for themselves. These societies that are becoming integrated with the global economy and playing catch-up with the rest of the world are experiencing the strongest, and most resilient, economic growth on earth.