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MWM Investment Process
- 1. The Humphrey Group April 2011 Mooring Wealth Management
- 2. Mooring Wealth Management (MWM) – Who we are Header Maturity Experience MWM Mooring Wealth Management Focus "Our goal is to be the primary source of wealth management advice for every relationship we undertake by providing unparalleled support and service." -Harrison "Cal" Buxton
- 3. Mooring Wealth Management (MWM) – Who we are CLIENT OBJECTIVES: Header Maturity Experience MWM Mooring Wealth Management Focus "Our goal is to be the primary source of wealth management advice for every relationship we undertake by providing unparalleled support and service." -Harrison "Cal" Buxton OUR PROCESS: Liquidity and adaptability Risk awareness Preservation of capital (protecting the nest egg) Current need for income and/or flexibility to access cash flow Growth of assets Custom-tailored planning (FGA) Focus on risk-reduction Active and prominent consideration of cash as a risk-adverse alternative We offer different disciplines that address our client's needs for growth, income or a combination of both
- 6. Supply & Demand: Integration Fundamentals – determine "quality", i.e. WHAT we buy Technicals – determine WHEN we buy (and sell) "If there is an excess of supply, we will not buy." –Jeanne Roccon-Rohm
- 7. The Lost Decade + - Contrary to the daily needs of individuals - Real need for current cash flow - Emotional need for stability or incremental growth of capital The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities. -9.76% -143.43 1325.83 SPX - S & P 500 Index % Change $ Change Current Value 4/1/2011 12/31/1999 to BUY AND HOLD?
- 9. The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities. Supply & Demand: Using Technology to our Advantage March 2007
- 10. The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities. Supply & Demand: Using Technology to our Advantage June 2007
- 11. The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities. Supply & Demand: Using Technology to our Advantage December 2008
- 12. 4/3/2009 Supply & Demand: Using Relative Strength The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities.
- 13. Supply & Demand: Using Relative Strength The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities. +87.44% +23.54 50.46 RSP- Rydex S&P 500 Equal Weight Index % Change $ Change Current Value 4/1/2011 04/03/2009 to Impact: +57.37% +483.33 1325.83 SPX - S & P 500 Index
- 14. Supply & Demand: Using Relative Strength The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities.
- 15. Supply & Demand: Using Relative Strength The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities.
- 16. Supply & Demand: Using Relative Strength The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities.
- 17. MWM: Our Investment Process The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities. 6.1% 212.363 REV 200.08 6.1% QQEW -> QQEW VS RSP 200.24 -1.8% 101.2425 REV 103.08 -0.7% RSP -> VWO VS RSP 101.95 -7.6% 75.2795 REV 81.47 -8.2% VWO -> EFA VS VWO 82.03 -8.0% 35.01 REV 38.06 -8.1% RSP -> SPY VS RSP 38.09 LIVE RSP PRIMARY MARKET: RELATIVE STRENGTH:
- 18. MWM: Our Investment Process The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities.
- 19. MWM: Our Investment Process The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities. 35.0136 -8.7% %age to O's Change 38.35 X's CAMSX vs. RSP Primary Market call fund position for Mod portfolio: 18.43 -7.3% %age to O's Change 19.89 X's DWTFX vs. ACWI 31.72 -5.5% %age to O's Change 33.58 X's LGMAX vs. ACWI Global Asset Allocation Positions for MOD portfolio: 7.96 -8.6% %age to O's Change 8.71 X's STIAX vs. AGG Fixed Income Position for Broad YIELD call and MOD portfolio: -7.9% 1.1% 129.5989 -28.4% %age to Signal/O's Change 166.8821 183.1199 BUY Signal 181.1 O's QQEW vs. MNYMKT -10.0% -8.1% 315.254 -10.3% %age to Signal Change 316.3813 323.1354 BUY Signal 351.49 X's VWO vs. MNYMKT -9.8% -6.3% 265.21 -26.8% %age to Signal Change 326.66 339.4941 BUY Signal 362.34 X's RSP vs. MNYMKT @ 3.25 to O's @ 2.5 to O's or X's If on SELL SIGNAL to MNYMKT, entire position moves to CASH CASH DECISION:
- 20. MWM: Our Investment Process The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities. $ 95.790 LAST MTG: 1.44% $ 97.170 IYT TRANSPORTS $ 140.260 LAST MTG: -0.76% $ 139.200 GLD change GOLD Non-US Equities, Commodities, Gold, Int'l FI, VAL-Energy, Basic Mat'ls Util, Non-Cyclicals $ 75.900 LAST MTG: -0.05% $ 75.865 DX/Y *on .25 chart, 81.50 is pivotal change U.S. Dollar* 5 YR $ 102.380 LAST MTG: -0.30% $ 102.070 STIP 8.5 YR $ 109.280 LAST MTG: -0.38% $ 108.860 TIP 5 YR $ 2.210 LAST MTG: 1.36% $ 2.240 USTBI 5 YR $ 22.020 LAST MTG: 2.09% $ 22.480 FVX 10 YR $ 3.470 LAST MTG: 0.00% $ 3.470 USTBE 10 YR $ 34.350 LAST MTG: 0.47% $ 34.510 TNX 20 YR $ 44.230 LAST MTG: -0.23% $ 44.130 TBF 30 YR $ 4.520 LAST MTG: -0.22% $ 4.510 USTBD 30 YR $ 44.990 LAST MTG: -0.22% $ 44.890 TYX change Treasury Rates
- 21. MWM: Our Investment Process The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities.
- 22. MWM: Our Investment Process The information set forth was obtained from sources which we believe reliable. But we cannot guarantee its accuracy. Neither the information nor any opinion expressed constitutes a solicitation by us of the purchase or sale of any securities or commodities.
- 23. MWM unique solutions Approaches with specific objectives Client Needs Growth Growth Growth & Income Income Equity Sector Moderate/Balanced Yield
- 24. Specifically built to address our clients' needs and goals Continuous monitoring and risk management Cash as an active consideration Integration of fundamental and technical research The Humphrey Group- Mooring Wealth Management "Building relationships last a lifetime." – Peter S. Humphrey
- 25. Mooring Wealth Management: Comfort Customization Observation Market Awareness Financial Expertise Opportunity Respect Teamwork
Notes de l'éditeur
- REference our biographies– experience, maturity, focus. Explain The Humphrey Group– our full service, custom planning capabilities, and MWM, our exclusive investment solutions
- CLient objectives are met by our process
- Supply and Demand is basic– we learned it in grade school. Yet, our industry ignores it!
- Institutions track these support and resistance levels and often trade on them, using technology Technology effects everything we do today, often magnifiying the impact (i.e. Egypt, Middle East, etc.) We use tools that track S&D in this way in real time on all investment alternatives available globally
- This performance data is directly from Dorsey Wright, and we will add the copyright as soon as I can figure out how to bring it in directly. UBS and Dorsey Wright have both given us written approval to use any materials they publish off their website. This demonstrates a Buy and Hold strategy, even when using a broad-based index, is not always successful over the long term.
- Human Investor 04/13/11 12:59 Financial Advisor talking points: Point and Figure Analysis developed by Charles Dow in the 1880's to identify significant changes in supply (the willingness of sellers to accept lower and lower prices) and demand (the willingness of buyers to pay higher and higher prices.) Imagine we buy a stock at $30. As it rises, on a PnF chart, those incremental increases are marked by an X, denoting buying, or demand. Once the buying stops, as it does here are $40– it is as though the auction that is the market asks "who will pay $41?" and there are no buyers—sellers enter the market, denoted by O's. When the selling stops and buying resumes, X's appear again. For these reversals to be considered significant enough to chart, they must occur in a magnitude of 3 increments or more. In this example, as the buying resumes, we reach the old "high"" at $40– the last time the stock hit this price, it was beset by selling. There is a "collective memory" on the part of investors, and the inclination is to sell at this previous high in order to avoid a repeat of the decline that ensued from this price the last time. Hence, this point is referred to as "resistance." In the auction that is the market, the appearance of a buyer at an even higher price than the last time buying stopped and selling began is significant, and considered a Buy signal.
- This is a chart of Bear<Stearns, through June of 2007. It shows a break of the Bullish support line, (note where the column of O's breaks the red dotted line) after having maintained a positive trend for 4+ years. Dorsey Wright wrote an opinion on June 26, 2007 that I will email for your review. We have approval to distribute the article. In it, they explain how both Bear Stearns and Merrill should be sold because of these significant breaks on their PnF charts. This was in JUNE 2007! Most Fundamentally informed managers did not sell then, and in fact, MANY OF THEM HELD THESE SECURITIES all the way down! Bear Stearns went out of business, and Merrill no longer exists. PnF analysis provided EARLY WARNING
- Here is an example of what has been happening in Gold of late– showing how an upside trend forms on PnF
- Here is an example of a relative strength chart, that functions much the same as a footrace, like the example we just saw. We position two securities and run them against one another based on price momentum. The winning security is the one enjoying greater demand. Here, we show a &quot;race&quot; between the S&P 500 Cap Weighted index (the one all the financial news programs quote) and its equal-weighted counterpart, the Rydex RSP. These are ETFs, readily liquid and available. We note that the RSP began winning the race between the two on 4/3/2009, suggesting it would have been better to own it instead of the S&P Cap-weighted. Let's see if this would have been correct!
- As you can see, by buying the security exhibiting the greatest relative strength, a lot of value was added. 52.41%, to be exact.
- Here we see the results for Buy and Hold from the time ETFs were first readily available to the investing public. We look first at simply buying the S&P 500, as is recommended so often by financial publications and articles, as a low cost way to participate in the market. Had we bought this and held it, we would have made 43.02% from 4/30/023. However, we would have had to tolerate a more than 50% loss of our capital during the decline in 2008.
- Now, we add a second choice, or to continue our track and field analogy, another competitor. Each time the relative strength of one grew greater than the other, we would own the one exhibiting the greatest strength, or demand. As you can see, we would have more than double our return by doing so, and, we would have significantly reduced our downside. Still, this kind of loss would have been worrisome. What if we add yet another competitor to the mix?
- Here, we show the alternatives of the S&P, the RSP and MNYMKT, or cash. Each time one exhibited greater strength, or demand, it was bought and held until a competitor the lead again. (I could happily show more intensive charts and supporting documentation here, but it would be fairly complex. We have branch approval to distribute these analyses to clients as examples of Relative Strength at work.) By following Relative Strength, we would have nearly quadrupled our return and reduced our downside exposure to a more palatable level.
- Here we show our Relative Strength screen for our broad equity asset classes. First, the equal-weighted S&P (RSP) vs. The S&P– race is currently being won by the RSP. IN the International markets, we have the EMerging mkts (VWO) vs. Established Mkts (EFA), currently being won by VWO. Then we take the winner of each race and pit them against one another to determine if we will have any international exposure. At present, the domestic markets are stronger and we therefore own no foreign positions. Finally, we look at segments making up the domestic markets, attempting to identify strength. We currently own the Equal-Weighted NASDAQ 100 (QQEW) because it exhibits more demand than the RSP.
- Our Investment Process in extremely focused and involves a continual assessment of asset classes and risk levels. This is an example of the types of things we review in determining our cash position in portfolios. As of today, all the evidence is quite positive, and leads us to maintain a fully invested position. We do not predict anything nor anticipate anything. We simply continuously evaluate the evidence and adjust accordingly.
- Here, we show our leading indicators in each category against MNYMKT, or Cash. This would show us when Cash is in greater demand than Equities, and lead us to raise Cash in portfolios. At present, equities remain quite strong, hence, our fully invested status at present. These indicators could change at any moment, leading us to adapt the portfolios accordingly.
- Again, other things we view– interest rates, the dollar, gold and transports.
- Here is an example of one of the many matrices we run each day– these are &quot;races&quot; of many competitors. Here, we show the &quot;race&quot; we use to determine the strongest area of the US equities market. Midcaps are enjoying the greatest level of demand at present.
- Another of our broad matrices, this one showing the 10 broad econimic sectors, together with gold, commodities and real estate. At present, energy tops the list, along with precious metals and commodities. We own these in our Sector/ETF and Mod portfolios. As holding fall out of favor, they are replaced by other securities exhibiting the greatest amount of demand at the time. Often, securities exhibiting the greatest relative strength continue to do so for long periods of time. This may be a result of the kind of herd mentality we discussed previously, and classic investor behavior of wanting to own what is already rising in price!
- We've develped these four strategies, and will continue to add additional strategies to meet client needs
- At the Humphrey Group, we sit down with each and every client, creating a custom-tailored plan that addresses your unique needs and goals. Once we know these, we set about determining investment solutions. We created Mooring Wealth Management because our experience with individual investors showed us that there was a pressing need for strategies sensitive to risk, that could adapt as opportunities and risks change. We continually evaluate Cash as an active alternative in our portfolios; We integrate fundamental and technical research in order to determine quality and the best time to buy and sell. We conduct continuous monitoring and risk management in our portfolios, updating and reviewing our analytics each day, and formally meeting as a group twice a week.
- Our watchword is comfort– it is our goal to make investing comfortable for all of our clients. This includes our promise of: Customization to your situation Our ongoing Observation of your accounts and the markets Our market awareness of Risks and Opportunites as dictated by Supply and Demand Our Financial Expertise, gained over decades of collective experience Our commitment to discover Opportunities when presented, and to protect when risk is apparent Our respect of your personal preferences, with a commitment to personalized service Our Commitment to Teamwork– the sum of our parts is greater than any one individual member, and we're all at your disposal! THANK YOU