Our Practical Approach to Tactical Investing

How we think about investing is practical

What we do about it is tactical

Practical

  • Practical thinking keeps us focused on the pursuit of our goals within the confines of limited choices.

 

  • We strive to evaluate current conditions as they are – rather than what we think should be or fear might be.

 

  • We don’t rely on predictions, but we do apply decades of practical experience and objective data to form opinions, exercise judgment and plan contingencies.

Tactical

 

  • Our hierarchy of tactical decisions flows from asset allocation and risk management to security selection based on relative performance and anticipated portfolio contribution.

 

  • Our portfolio is actively managed to allow for multiple contingencies with the liquidity to respond to new information and changing trends.

 

  • We hold ourselves accountable through transparency and performance monitoring.

Rather than implement a static buy-and-hold strategy, we maintain a dynamic process that is constantly evolving. We primarily seek to add value by:

1. Participating more in advancing than declining markets.

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We believe markets are cyclical - asset classes go up and down in extended trends (lasting months, often years).

 

We also seek to recover from downturns more quickly than our benchmark; reducing the impact of “sequence of returns risks” and helping investors tolerate and potentially capitalize on volatility.

 

2. Market Leadership is also cyclical – sectors, strategies and geographic regions move in and out of favor.

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If we can de-emphasize weak areas while adding and/or maintaining exposure to areas of strength, our portfolio ends up ahead.

3. Current conditions often diverge from long-term trends.

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If we can participate more in advancing than declining markets, we end up ahead.

 

We also seek to recover from downturns more quickly than our benchmark; reducing the impact of “sequence of returns risks” and helping investors tolerate and potentially capitalize on volatility. ​​​

3. Current conditions often diverge from long-term trends.

Most financial plans use long-term performance history and assume stocks, bonds and cash will earn similar returns to their long-term average. But over periods as long as 10-years, actual annualized returns are rarely consistent with these average results, creating significant risk to financial outcomes. To mitigate the risk of outpacing benchmarks but earning a return that is insufficient to meet return objectives based on long-term performance-based expectations, we:​​

 

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  • Base asset allocation decisions on a combination of long-term historical performance, correlations, and an assessment of current conditions (risk and return potential)

  • May invest in a broad range of asset classes including Stocks, Bonds, Precious Metals, REITs, and Commodities

  • Maintain the flexibility to raise cash and hedge the portfolio using options strategies

Sowell Management and Alexis Investment Partners, LLC are independently owned and operated. Advisory services are offered through Sowell Management, a Registered Investment Adviser.