Trinity Asset Management’s investment style has evolved over the years to become less of a “security selection” manager, and more of an asset allocator of client savings.
Maintaining balanced accounts for clients are the primary investment objective today, which involves maintaining a balanced asset allocation between equity and fixed-income investments, driven by “expected returns” and the valuation of respective markets.
As an example, with very low yields in the Treasury and credit markets as of the Spring, 2015, and with an unemployment rate of 5.5%, down from 6.5% in mid-2014, the thought is that fixed-income represents far more longer-term “risk” than reward, while the SP 500 and the Nasdaq are more fairly-valued today than the bond markets.
However, much of the investment process is driven by an assessment of client risk, as well as absolute and relative valuation metrics of stock and bond markets, both in the US and non-US markets.
Where Trinity does pick individual stocks for client accounts – and we like to do this for clients, and clients do like to own the stocks of businesses that they see and feel everyday (e.g. Starbucks, Amazon, Ford, GM, etc. etc.) we do quite a bit of fundamental homework, but also look for lower-risk entry points using technical analysis, and sentiment data.
For clients that prefer “all-stock” portfolios, Trinity will blend a portfolio of traditional value and growth (traditionally known as large-cap “core”) stocks for clients, to reduce portfolio volatility.
For clients that prefer balanced portfolios, we will pick individual stocks, as well as sector ETF’s and some country and asset-class index funds, which are combined with open-ended fixed-income funds and ETF’s.
Laddered-bond portfolios provide a defensive strategy for bond portfolios in rising-interest-rate environments.
Also, the evolving capital markets and development of instruments such as ETF’s and “Liquid Alt’s” funds has brought asset-classes and investment strategies that were traditionally not available to retail investors, into the retail investing world. The point being that Trinity Asset Management is always looking for new vehicles and tools, to offer to clients, to improve performance, and lower the cost of investing.
The famed martial artist Bruce Lee once opined that “the best (fighting) style was no style”. While I don’t necessarily agree with that sentiment in its entirety, the fact is the US and global stock, bond, and commodity markets, not to mention the various vehicles to invest in these markets, requires constant vigilance, and the persistent analysis of risk vs return.
The constant evaluation of risk versus return never stops.