It is helpful to have an investment thesis because it helps a manager game plan for different outcomes. In our opinion the key to any investment strategy is flexibility. After all, you can't fight the market; you can only maximize the opportunity it gives.
Combined fundamental and technical analysis:
It is our belief that a sound investment strategy and investment style must utilize each method of analysis. There are instances where a position is purchased solely on one or the other. We prefer to screen the universe of investment opportunities using a global approach to identify the sectors in the economy that we believe will outperform their peers and the market in general. Then using a few key fundamental indicators we identify the companies within those sectors that we believe to be superior, and utilize the charts to time the purchase and sales of these positions.
This firm was organized for the purpose of investing and trading in a wide variety of securities and financial instruments, domestic and foreign, of all kinds and descriptions, whether publicly traded or privately placed, including but not limited to common and preferred stocks, bonds and other debt securities, convertible securities, limited partnership interests, mutual fund shares, options, warrants, commodities, futures, derivatives (including swaps, forward contracts and structured instruments), currencies, real estate, monetary instruments and cash and cash equivalents.
Quantum intends to follow a flexible approach in order to place our clients in the best position to capitalize on opportunities in the financial markets. This diversification benefits help to smooth returns, reduce volatility and decrease asset-class and single-strategy risks. We may allocate funds in to a certain strategy in response to market trends allowing us to more easily capitalize on favorable market conditions.
The traditional model for diversification suggests that with the proper mix of large cap, small cap, and mid cap stocks, REIT’s, utilities, international equity, and bonds; an investor could basically buy and forget because one sector would rise to balance the sector that fell. Very recent history exposes that thought, also called “Modern Portfolio Theory,” as an instrument of wealth destruction that will, along with “Buy and Hold,” take its rightful resting place in the investment style scrap heap.
The reason is that because of globalization, asset classes are more correlated than ever before. As a result of computerization, the markets move faster than ever before. When stress hits the financial system, most markets tend to move together.
We strive to diversify enough to provide a cushion if one or more ideas fail to meet expectations, but not so diversified that we merely mimic the market .Our idea for diversification involves optimizing the mix of investments we feel will grow in a strengthening economic climate with those that we feel will outperform in a weak one. Add to the mix a dividend strategy for wringing returns from a directionless tape, and we feel we are ready for whatever market conditions lie ahead.
Our idea of diversification involves optimizing the mix of investments we feel will grow in a strengthening market with those that we feel will outperform in a weak one.