“When everybody thinks alike, everyone is likely to be wrong.”
Humphrey B. Neill, The Art of Contrary Thinking
Canadian Investment Management: We are contrarians:
Prior to 2006, ‘everyone’ bought an asset sector called ‘income trusts.’ Then, in 2006, this sector evaporated in a meltdown. If you owned income trusts, you lost your shirt.
ValueTrend didn’t like income trusts, didn’t own them, and didn’t recommended them to clients. That’s not good investment luck. That’s good investment principle!
Please don’t think our principle is always to blindly avoid the mainstream. Our principles require we directly examine the process of investing from a new, fully informed perspective. We create an entirely new system of evaluation. Only then do we take our first steps. If those steps lead away from the mainstream, we take them because that’s the right thing to do.
Contrary thinking leads to personalized client portfolios. Each portfolio is a matter of ABC:
To correctly align your asset allocation, we consider pertinent variables: your tolerance for risk, your investment goals, and your age. We use your data to create your portfolio. That way you own an ideal combination that maximizes return while it limits risk.
To generate stable income we employ a “ladder strategy.” It includes government and quality corporate bonds with different maturity dates.
Balanced with quality preferred shares for tax efficiency in non-registered accounts, this method provides the necessary income and safety for an individual client’s needs.
To achieve equity growth, there is no substitute for in-depth analysis. Technical analysis is used heavily in the top-down buy and sell decisions of both broad market ETF’s and sector ETF’s.
The ValueTrend portfolio also continuously evaluates about 8,000 individual Canadian and U.S. stocks for such indicators as earnings, growth, predictability, value, and market capitalization. After choosing the gems, we hold them patiently until their value materializes in the stock price.
ValueTrend’s Contrarian Credo
- Never rely on hunches, fads or macroeconomic events.
- Never subscribe to the buy-and-hold mantra.
- Never trade just for sake of action.
- Always drive portfolio decisions based on facts using quantitative and qualitative filters.
- Always buy when the potential return appears favorable.
- Always sell when the risk of holding outweighs potential return.
LIMIT YOUR RISK, KEEP YOUR MONEY.