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Tactical Money Management

TACTICAL MONEY MANAGEMENT

Loss prevention and volatility stabilization couldn’t be more critical to an investment portfolio’s success. We have found that it’s incredibly difficult to see long-term financial success when portfolios get caught up in sudden and devastating market declines that erase previous gains. Taking major leaps backwards after years of progress doesn’t make financial sense. Our goal and philosophy is to keep pace with market uptrends but also to understand current market conditions and guard against devastating market declines. Over time, a portfolio that loses less will ultimately have more to gain.

BEAR MARKETS

As most investors are aware, markets move in define cycles – bull and bear. When a market is bull’ish it is moving on an upward trend and the investment philosophy is simple – stay invested. But what is the investment philosophy when the markets are bear’ish, or moving downwards? Before you establish a philosophy you need to understand the facts about how bearish cycles work.

  • During 2000 – 2010 if you were invested in the S&P 500 and were able to go 100% to cash during the last two market corrections you would have had a +172% return versus a -24% loss from buying and holding it. West Coast Capital Management uses money managers who agree with and utilize this investment approach to protect portfolios.

THE PHILOSOPHY

There are generally two different philosphies on how to deal with downward bear markets. The first is to stay invested, or hold your positions, until markets recover- this is known as buy-and-hold. The second is to use strategies that are not affected by market declines or to sell positions at the early detection of a bear market and stay in cash or other alternatives try to achieve positive returns. This is known as Tactical Money Management.

West Coast Capital Management believes in using absolute return managers. We believe that avoiding loss as the number one investment objective will preserve and increase wealth.

 

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