Investment philosophy and strategy pursued

  INVESTMENT PHILOSOPHY

Flexibility in the market serves as the most effective means to generate a desirable rate of return.

Dividend yields, which make up much of a stock’s return, are currently very low, and price-to-earnings multiple expansion unlikely to match that seen in the 1980s and 1990s.

Therefore, we choose to be more flexible instead of being restricted by devotion to a traditional, single asset-allocation approach. In other words, with the expectations that the years ahead will not perform as in the past twenty years, it is essential to be an active consultant manager, effectively making adjustments in these changing economic business cycles as these rotations occur, from a market neutral stance of half the investment portfolio being bullish and the other half bearish, to just being 50% vested, through trending market conditions — effectively reducing portfolio volatility and enhancing returns on investment, through either a rising or declining stock, bond or real estate market.

Consistently outperforming the market by a modest amount leads to large rewards.

Compounding is a very powerful, but often overlooked, aspect of investing. Consistently outperforming through either a rising or declining stock or bond market, by even a few percentage points per year, dramatically increases the wealth of an investor over modest time horizons.

Monitoring psychological levels of “Greed and Fear” – essential for long-term success.

Private Account Consultant Manager manages all client accounts by evaluating both market and investor psychology by using various types of statistical data and wave pattern technical analysis.

Diversification to enhance long-term client portfolio stability.

From an operational perspective diversification, when partially or fully vested, provides us with:

• • Ongoing insight into the market composition, through either a rising or declining stock, bond or real estate market environment.
  • A baseline for the initial construction and ongoing re-balancing as we transition from either a bullish or bearish accumulation phase of a new position to the liquidation phase as market conditions change.

We invest solely in the best interest of our clients.

Private Account Consultant Manager is an independent service, and, when applicable, receives a performance bonus, so has no potential conflicts of interest that could adversely affect our client’s investment performance. We receive no commissions to cloud our investment judgement and we do not participate in “revenue sharing” programs with any brokerage or mutual fund families that could bias us toward funneling client assets into particular assets or funds.

INVESTMENT STRATEGIES PURSUED

Our investment style can best be described as active asset allocation based. Unlike most public investment firms that focus solely on “value” or “growth” stock investing, we recognize that economic business cycles, relative valuations and market psychology all influence various market sectors differently and lead to an ever-changing landscape of exploitable investment opportunities. Our ability to generate above-market returns hinges on the quality of the decisions we make in three key areas – broad stock market exposure, wave pattern technical analysis and individual investment selection.

Where possible we implement our investment views using exchange traded funds (ETFs) or no-load index mutual funds that pursue a range of investment strategies from large cap growth and value stock to more specialized regional emerging markets debt, equities, natural resources, and “market-neutral strategies” — half the investment portfolio bullish and the other half bearish. In appropriate cases we will also hold positions in individual stock, preferred stocks, closed-end mutual funds, US Treasury zero coupon bonds (STRIPS), and conventional US Treasury Bills, Notes and Bonds. These are traded by major institutions throughout the world for the purpose of direct profits as well as a hedging tool for large cash and equity positions. These preferred index mutual funds and ETFs are highly liquid and can generate profits in both a rising or declining stock, bond and real estate market.