Are you active or passive managers?
We are both in different contexts. We believe that active asset allocation is the only way to build a truly customized portfolio that can also adjust to dynamic market conditions (this is also called adaptive asset allocation). However, we do use passive vehicles in some cases, when it is apparent that a passive vehicle outperforms an active vehicle on a fee-adjusted basis.
Do you market time?
Essentially, any active strategy engages in market timing, so yes. However we also understand that the most important driver of long-term returns are adhering to a risk appropriate asset allocation policy. We endeavor to decrease the risk in portfolios when we believe the market is overpriced and purchase securities when we believe assets are trading at discounts. However, we are considerate of a particular clients risk tolerance, effects on performance and common sense, in regard to heavy trading and volatile movements within and between asset classes, industries and securities.
What are your portfolio management goals and priorities? What is an Investment Policy?
First and foremost the highest portfolio management priority is the adherence to the Investment Policy for each of our clients. This provides the boundaries set forth jointly by the client and SCA to manage the portfolio. Secondary goals and priorities include clients’ specific benchmark for performance and attributable excess performance above market returns.
Are there differences between Institutional and Individual techniques for managing money?
Of course, however they are not as different as one might thinks. We follow the same basic principles whether we are talking about an individual or institutional client. Each client is different and investment suitability is defined on a case-by-case basis. Many factors such as willingness and ability to take risk as well as immediate cash flow requirements and long term goals, impact investment policy and asset allocation strategy for each SCA client.
Is there a particular strategy or school of thought that you subscribe to?
We believe that the market is a complex structure that is influenced by many variables, including the behaviors of individuals and society in general. Again, this is what makes it impossible to predict accurately. However, over time risks and opportunities can define themselves with higher probabilities than in the past. We may not get the timing exactly right, but the moments do exist to capitalize on or avoid certain areas of the market. There is no one strategy or school of thought (e.g. behavioralism, contrarianism, momentum, mean-reversion etc.) that always works, though we understand the ones that have experienced success under certain conditions in the past or have reason to in the future so as to draw on the right decision framework at the right time.