Private Tour of Investing
Welcome to your private tour of investing with Adaptive Market
Strategies. To go directly to a particular subject, please click through
on any particular topic below. To take the full tour, just begin by
clicking on first topic the table of contents on the right. Enjoy your
visit!
Why Buy-and-Hold Works Only Part Time
Buy-and-Hold investing is buying without an exit strategy. In fact,
buy-and-hold only works about half the time - when the market is going
up. The rest of the time it is a disaster! Stock market declines are a
fact of life. Successful, investors learn how to protect their money in
falling markets, too.
The Fatal Flaw most investors find
Over many years we have reviewed thousands of investment portfolios
and have found that virtually all investors have a fatal flaw that
causes vast losses and untold worry. That flaw is lack of
diversification. We're not talking about ordinary diversification
among stocks and bonds, or owning more than one stock or bond. Most
investors suffer from a lack of strategic diversification-- they have
only one strategy, buy-and-hope. Think about it. How many investment
strategies can you name? If you had painful losses in the 2000-2002
market declines, this is probably why!
There is a better way to invest
Our strategies Adapt to Changing Markets. Do yours?
Our Philosophy
Born of Insights
Stock market investing isn't always easy like it was in the 1990s.
Over 200 years of history shows us that there have been 7
"Generational" bear markets that averaged 14 years in length, during
much of which time money in the stock market lost purchasing power.
Buy-and-Hold investors often suffer huge losses during these
periods, yet traditional financial advice discourages changes that
might protect portfolio values.
Buy-and-Hold is the Way Wall Street
Wants You to Invest
Wall Street spokesman often hold up Peter Lynch or Sir John Templeton
as icons of Buy-and-Hold. Sir John Templeton and Peter Lynch became
investing legends buy making fortunes for their clients during the
16-year Generational bear market of 1966-1982. Yet when one examines the
records that made them famous a different picture emerges. Templeton was
always willing to sell if he found a better bargain. Peter Lynch, while
running the Fidelity Magellan fund, had an average holding period for
his stocks of under 8 months.
You don't need Wall Street
The truth is, you don't need Wall Street, but they need you. If your
think about it, you'll see that Wall Street institutions make most
of their money when they have your money to work with. They last
thing they want is for someone to sell and take their money and
leave the "system". So there has developed a huge propaganda machine
that keeps saying "Buy-and-Hold is the only way to invest". But it
really isn't.
The Big Lie
A landmark study for pension funds, called the Brinson Study , has
been frequently misquoted as saying 92% of investment returns comes from
asset allocation decisions, so just "correctly" diversify among the
asset classes recommended by Modern Portfolio Theory, and leave things
alone. Stock picking and market timing only combine for 8% of returns,
so don't bother with them, leave that to our fund managers.
Buy-and-hope. Sound familiar?
To us it seems that Wall Street took this study and twisted it for
their own ends, because our interpretation leads to a very different
outcome.
Our interpretation of the Brinson study is that most of the
differences in returns come from which asset class one is invested in at
the moment. Ninety-two percent of gains stem from being invested in the
right spot. And 92% of losses come from being in the wrong spot. We
think that investors who can move from the wrong spot to the right spot
will have a distinct edge over a buy and hope investor.
The Easy way to make money in stocks
Asset Allocation, how you spread your money out among different
investment types, is not a one-time decision. The easiest way to
make money in the stock market is to have more money in asset
classes that are going up and less money in asset classes that are
going down. This means moving from one asset class to another
according to market conditions. At Hepburn Capital Management, LLC
we have developed world class strategies that systematically that
move client investments into categories that are going up, and out
of categories that are going down. We call them strategies that
Adapt to Changing Markets®.
Tri-Level Diversification
Discover Tri-level Diversification
At Hepburn Capital Management we give our clients extra protection
against market declines. As you would expect, we diversify among
investment classes, and we diversify among different stocks or bonds
within those classes. But we go one step farther and also provide active
investment strategies giving three layers of diversification instead of
just two. It makes sense that three levels of protection are better than
two. Tri-Level protection makes it more likely to get the investment
results you want.
Know when to sell
Knowing when to "hold 'em and when to fold 'em" is what
makes Hepburn Capital Management unique. Market oriented investments
never go up for ever. Knowing when to sell can spell the difference
between a successful investment and a disaster. Even the poor Enron
shareholders had a good investment. Enron shares went up over 1000%
at one point. Does 1000% sound like a good investment to you? It
does to me! But, what those investors didn't have was a strategy
that told them when to sell.
Sometimes Cash is King
Even with low interest rates money market funds can look real good
compared to stock market losses. When the stock market looks uncertain,
we will Adapt to Changing Markets®, and retreat to the relative safety
of a money market fund and wait patiently for another good looking
investment.
A Nobel Prize improved upon
We think we have improved upon Modern Portfolio Theory by enhancing
it's output. MPT says that for any level of risk one wishes to take,
based on many years of market history, there is a mix of asset
categories that would have produced the best returns if bought and held.
If every investor could stay invested for 30 years, and if we also knew
that history would exactly repeat itself, MPT would be the ideal system.
But the investing world is not nearly that neat. We think MPT by itself
needed some work. So at Hepburn Capital Management, LLC, we enhanced MPT
by adjusting each asset class recommendation from 100% invested to 100%
in cash depending upon market conditions. This allows MPT to do its
work, without exposing our clients to all of the risks of
buy-and-hold and also greatly reducing volatility.
The HCM Difference
We are pure money managers.
All we do at HCM is fee-based money management. We don't have the
distractions that ordinary brokers do. We don't have sales managers
telling us what to push. We have focus. We are portfolio managers.
Our Specialty
All of our strategies are actively traded and Adapt to Changing
Markets®. We perform a daily analysis of over two hundred prices
covering over 70 market segments to determine what asset categories
are gaining or losing strength. We systematically move client money
into asset classes going up and out of asset classes going down.
Extraordinary Systems
If the markets move against us, we are set up to move hundreds of
client accounts to cash in minutes if we need to. Most ordinary brokers
would take weeks to accomplish this, and in times of rapid market
declines, time is money.
Our Trade Secrets
Adaptive Strategies Program
This custom software program written by our founder, Will Hepburn, is
the heart of our analysis, and truly makes our work unique. No other
advisor can offer you what we do because Hepburn Capital Management,
LLC, is the only investment advisor with the Adaptive Strategies
program.
Fundamental Analysis-determine
the trend
A key step is determining what the trend of the market is. This
tells us which technical tools will be most likely to work best.
Technical Analysis-which tools to
use depends on fundamentals
Technical Analysis refers to all those charts and graphs that look
like a foreign language to those not familiar with them. We have
over 40 Economic and Market indicators just to gauge which of the 70
or so technical indicators might be most effective.
Expertise Combined with Discipline
When you have proven systems like we do at Hepburn Capital
Management, LLC, you must have both the discipline to follow them in
uncertain times, and the expertise to know when a current situation is
one that can not be neatly programmed into a computer. At HCM we have
both.
Humility
One must know when systems will work well and when they won't. And
be ready to Adapt to Changing Markets®.
How you Benefit
We Invest Systematically
Our world class strategies systematically move client money from
weakening investments to ones showing greater strength. When markets
are uncertain, as they often are, we wait patiently in the relative
safety of a money market fund. We are not compelled to always
invest-there are times it is best not to-but we are ready to be
fully invested at any time.
We use No-Load Investments Only
Our fee-only compensation structure bests aligns the interests of the
client and investment advisor. Our clients can be assured that when we
move from one investment to another it is not because we got paid to do
that move, it was because we thought the new investment was the best
place for the money. We earn no more if we move money ten times or not
at all. The only way we can earn more is to have your account worth more
next year than today.
Smaller Waves = Greater Comfort
Few investors like wild ups and downs in account values. HCM clients
have experienced much lower fluctuations in account values than
Buy-and-Hold investors. Our first objective is to reduce the risk of
stock market investing, because we believe good returns are then easier
to obtain.
The 3 Most Important Laws of Investing.
The 3 most important things in real estate are location, location,
and location. And the 3 most important things about investing are
Don't lose money, Don't lose money, Don't lose money! At Hepburn
Capital Management, LLC, this is what we worry about, so you don't
have to.
Can't a Mutual Fund Do This?
Funds are too big
Active management strategies are doable for a boutique firm like
Hepburn Capital Management, LLC, because of our size. We are small and
nimble compared to multi-billion dollar mutual funds. A mutual fund
cannot quickly buy or sell large holdings without destroying the market
is it in. We limit the assets we will allow in any of our strategies so
we won't have this problem.
Mutual Funds are Hogtied
Most mutual funds are required by their prospectus to stay heavily
invested. They literally cannot move investor money to cash without
violating their charter, so don't expect this service from a mutual
fund.
Mutual Funds stay "Fully Invested"
A look at history shows that the average mutual fund was 95%
invested in the year 1999, and stayed 95% invested in the year 2000,
95% invested in 2001 and 94 % invested in 2002 . Obviously the
average mutual fund has stayed fully invested through good times and
bad. Is this what you want when the markets are in turmoil? At
Hepburn Capital Management, LLC, we will move to cash when we think
it is warranted. Occasionally, even to 100% in cash. We can be
aggressively defensive when warranted.
Choice of strategies
We have a combination suitable for You.
Every client is different in financial objectives, risk tolerance,
investment time horizon and resources. With our variety of strategies
from low "surprise factor" strategies to aggressive, we can recommend a
combination designed to help you meet your financial goals.
Our publicly offered
strategies include:
All Adapt to Changing Markets®
All of our different strategies have one thing in common. They all
are designed to Adapt to Changing Markets®. If you want to make sure
your investments are being watched over every day to determine if we
should buy, sell or hold, then Hepburn Capital Management, LLC, is the
place for you to invest.
Take the First Step
Identify Your situation
Click the
Risk Tolerance Test link to take our quick and easy test to
gauge your willingness to take risk to achieve your financial
objectives. This will provide and excellent starting point for us to
recommend an mix of strategies that will be appropriate for you.
Contact us to personalize your advice
Other things we will discuss will be the tax status of your accounts.
This will affect our recommendation, because more active strategies can
create more work for your tax-preparer. Some investors care about this
more than others. The size of accounts affects strategies that may be
available. If may not be cost effective to run certain strategies in
smaller accounts, even if the total of all accounts meets our client
minimums.
See if You Qualify for Reduced Fees.
Our fees are on a sliding scale from .75% per year for large
accounts and non-profits, to 2.5% per year for our smallest
accounts. When you call we can give you a firm number. We
occasionally have had prospective clients tell us they feel that our
fees seem high, and we understand that there are investment advisors
who do charge less. Many of our clients felt the same way until they
found that if we can avoid only one big market decline for you we
can pay for many years worth of fees. Our intensive style of daily
management of your accounts is expensive, but market declines can
cost more in dollars, worry and lifestyle impacts.
Get Details
Call us today to get answers to all of your questions and get
started. 800-778-4610 or email us at
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to arrange a telephone appointment that will suit your schedule.
Request Paperwork
Our customer service team will prepare all forms and overnight them
to you for your signature. Account transfers often take several weeks to
complete, so start now.
Kids, Don't Try This At Home
Investor Mistakes
Dalbar, Inc. studies the financial service industry, and they have
found that individual investors vastly under-perform the market indexes.
From Jan 1, 1984 to Dec 31, 2002, the S&P 500 Index averaged 12.22% per
year growth, while the average equity fund investor only earned 2.57%
per year. Why this huge difference? Because individuals try to Adapt to
Changing Markets® without having a strategy for doing so, and tend to
buy high and sell low over and over. At Hepburn Capital Management, LLC,
we have strategies to help us keep on track and not be distracted by
tips from friends, news stories, etc.
Airplane Pilot Analogy
Anyone who has ever piloted an aircraft knows that when you can’t
see because of fog or darkness, you must use instruments to tell you
which way is up and where to turn, or the risk of crashing is very
high. At Hepburn Capital Management, LLC, our instruments are our
fundamental and technical analysis. They tell us what to do. If you
don’t have a system, hire us to help keep your money safe from major
market declines.
Discover how easy it is
To get peace of mind
The peace of mind that comes with knowing that an active money
manager with the capacity to move to cash when required is protecting
your finances and your family’s future. Peace of mind is the ultimate
financial goal.
Think how Happy you will be
When you don't have to worry about things you hear on the financial
news, or explain them to your spouse.
Its as easy as 1-2-3
1. Complete our Risk Tolerance Questionnaire
2. Call 800-778-4610 or
email us to request forms
3. When funds are received we will get your accounts in sync with
our world class strategic models.
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