Drawdown is Everything
The Model. The KP Model remains Green – full policy exposure to US equities. From the Trading Room. When it comes to investing for retirement, the biggest challenge for investors is the volatility of the underlying investments — generally stocks and mutual funds — which, historically is quite large. Typically, it will run two or three times the expected annual return. For example, if we have a portfolio that has returned, say, 8% annually over the last 10 years, we can assume that the annual volatility of that investment ranged roughly from 15% to 25%. That’s challenging...
Read MoreTime for Active Management
We find ourselves in the early evening of passive investment management approaches. Despite the portfolio drawdowns we experienced in 2022, buy and hold portfolio management continues to be the overwhelming choice of investors, their advisers, financial academics, and the Wall Street giants. This idea is hard-wired into the system. After all, its worked for forty years . . . Passive investing does offer well-known benefits: near-perfect index tracking, lower-cost, and a friendlier after-tax result. Should we even be thinking about active management? An excellent time to consider that...
Read MoreInformed Participants
Our active management approach is supported by the belief that better information leads to better investment performance — more gains, fewer losses, or combination of two. A recent academic study of “informed participants” agrees —The authors found that larger investors tend to make more productive decisions about individual investments. Not always, but often. There was no suggestion that this reflected access to non-public information, only that the deeper research / harder work of the larger players often led to better performance. That’s what we all would like...
Read MoreActive Large-Cap Portfolios
Over the past two decades, Keller Partners has developed a statistical methodology that scores the performance potential of individual securities. This analytical engine operates exclusively on technical factors, i.e., market-generated inputs and is designed to monitor the activity of informed investors. Favorably-ranked securities become the building blocks of our Active Large-Cap Portfolios. By design, these 10×10 Portfolios prioritize the management of volatility, specifically portfolio drawdown. They also seek additional return (alpha) through through the investment selection...
Read MoreTrend Condition Green
The KP Trend Model returned to a Green status effective the close on April 26, 2024. Full policy exposure to US equities.
Read More