Behind the Curtain

If you are an HMC Partners client, you know that recent market volatility has dictated that we make drastic changes to your portfolio. We have witnessed a market that has been headline driven by news items like the debt ceiling mess, slow job growth and the European debt mess. For better or worse, we now live in a cyber-society where the constant bombardment of information can impact not only investors, but advisors as well.

With all the recent changeswe have made, we would like to give you a look at how we process all the information available and make necessary changes we feel vital to improve and protect our clients’ portfolios.  One major change we made was to move from growth positions to large cap dividend producing positions. We’ll give you a peek at the HMC process for making major moves.

Every Monday morning, one of the most important aspects of our staff meeting is our review of each investment we use in our portfolios and what their performance is versus their similar index.  Couple that information with the major economic trends of the day and we have lengthy discussions of “what we see.”  It is in these meetings that we begin setting the stage for changes to be made if circumstances dictate.  We determine “if this…..then that” so we are always ready to make the move.

We then employ the services of experts at our broker/dealer LPL Financial. Through phone conversations and emails with people like LPL Financial’s Chief Strategist, Jeffrey Kleintop, we look for affirmations of what we’re seeing and that subsequent changes make sense for our portfolios.  We then set up conference calls with some of our favorite investment firms like Federated, PIMCO, Lord Abbett and DWS and ask them all the same predetermined questions to find consensus.

Several weeks ago, we determined that a slow growth economy was what we could expect for the next 6-12 months. Little to no job growth would continue to weigh down the economy, so being in positions that paid dividends seemed to make more sense than being in positions that make money from growth. We determined that making drastic changes in large and mid-cap growth positions was a distinct possibility and when zero jobs were created in August, we were poised to make the change. However, that decision had been made weeks earlier due to the process we use.

We pride ourselves on our proactive management. To be proactive, we try to have moves ready if the “what ifs” occur. We wanted to give you a quick look at what went into the process of a major move in our clients’ portfolio.  We are ready to move if markets move in either direction.

No investment strategy can guarantee success or protection against loss.  Investing involves risk, including loss of principal.

Advertisements
This entry was posted in HMC Partners. Bookmark the permalink.