The LCP Tactical Managed ETF Solutions TM
"The Renaissance was a rebirth of man's life on earth. Freed from the shackles of authority, man's mind was viewed as able to understand the universe. Far from being a tortured soul trapped in a deformed bodily prison, man was regarded as rational, beautiful and heroic - worthy of happiness and capable of great achievement. Man, in the Renaissance view, need not bow down in passive resignation, praying for salvation. He can choose to undertake great challenges in the face of seemingly impossible odds; he can actively pursue success, fight for victory - even slay a giant."
"Michelangelo's David is the best expression of this Renaissance sense of life. The sculpture was inspired by the story of the young shepherd boy who chose to fight a far stronger adversary in order to save his people from invasion. Wearing no armor, with a sling as his only weapon, David defeats Goliath using superior skill and courage."
- Lee Sandstead
The investment world as we know it is changing. What has worked in the past may not continue to work in the future. No longer may bonds be viewed as a long term hold and safe haven asset class, as prevailing yields in higher credits now fall woefully short of our base inflation rates. This poses a serious challenge for investors aiming to preserve the purchasing power of their capital. Concurrently, the equity markets today pose similar risks, but perhaps with far greater potential for loss, as global growth continues to slow and geopolitical risks increase. This cataclysm of events has created a state of paralysis for many investors. Traditional approaches to asset allocation have done little to shield investors from experiencing significant losses in recent years and many fear the repercussions of making the wrong move at the wrong time. Many have lost confidence in the process. The LCP Tactical Managed ETF PortfoliosTM take a different approach. Rather than simply buy and hold an asset allocation, we seek to exploit the pendulum as it swings; employing disciplined methods of asset rotation.
The investment markets have a tendency to move in multi-month trends, in alternating fashion between periods of risk-on and risk-off. Utilizing ETFs (Exchange Traded Funds) as our investment vehicle of choice, our portfolios provide investors with a tactical approach to investing; with the ability to overweight equities when risk assets are in favor, and to reposition the portfolio in assets that will provide a margin of safety when they are not. Underneath the broader markets, there are underlying trends within the asset classes; as sectors of the equity markets alternate from leader to laggard, and various maturities and grades of fixed income move in and out of favor. Simply put, we aim to participate in the asset classes and sectors of the market experiencing favorable momentum, and avoid those under extended pressure.
The LCP Tactical Managed ETF PortfoliosTM provide investors with the opportunity to invest in risk assets with a margin of safety not commonly found in traditional investments; with the potential to generate positive returns in good markets or bad. Over time, this approach has proven to provide strong participation in the upside of risk assets, but more importantly with a discipline to avoid participation in prolonged market declines. Avoiding outsized losses provides the engine for the true, long-term sustainable growth of an investment portfolio.
Within the investment industry we are witnessing a Renaissance, as the Managed ETF segment of the market continues to grow rapidly. ETFs provide investors with liquidity, transparency, low cost, and broad diversification. The construct of a portfolio can be changed with only a handful of trades. This provides ETF investment portfolio managers with the opportunity to implement tactical allocation shifts that can serve to protect the portfolio from incurring a permanent impairment of capital. What not too long ago was previously impossible, is now possible.