We believe that the primary purpose of investing for many investors is to achieve an acceptable NET rate of return (after fees) on their invested money. Additionally, how much risk was taken to achieve that rate of return?
TWO METHODS OF INVESTMENT MANAGEMENT
Reppond Investments, Inc. uses two forms of investment management. One is passive (buy-and-hold) investing in which a client’s assets are allocated into a portfolio designed to best help them achieve their goals while lowering typical stock market (or bond market) risk. Additionally, our approach to rebalancing is unique and we believe that it can definitely add value to a properly allocated portfolio.
The second kind of investing is active management. This type of investing requires continual adaptation of investment strategies to current market conditions. Stock market activity is monitored with the goal of lowering downside exposure to the market during periods of increased risk. Our goal is to provide the most consistent and positive investment performance possible. We believe that we can best achieve this goal with effective active management strategies based on years of solid research.
As an independent investment advisor, Reppond Investments, Inc. has developed a set of investment strategies which use active investment management. These strategies are designed to minimize stock market risk and still participate in the upside of the market. These strategies are based on proprietary, mathematical methodologies and were developed internally with over 15,000 hours of hard research.
Our strategies are designed to produce consistent long-term above average returns while minimizing volatility. In short, the long-term risk adjusted performance of our strategies is designed to exceed the performance of the S&P 500 over time with less volatility.
LOW VOLATILITY STRATEGY
The Low Volatility Strategy is an investment strategy designed as a tool to invest in some combination of broader market index funds or sector funds with the primary focus on managing possible downward market corrections.
This strategy is designed for the selected index or sector fund to be used during periods of lower risk for that particular index – which we believe allows us to capitalize on the opportunity for gains with reduced risk. The index funds used track the Dow Jones Industrials Index and the NASDAQ 100 Index. The sector funds used track a variety of market sectors. Risk is managed by being either partially or fully invested while transitioning client assets to money market funds at times of potential increased risk
LOW VOLATILITY STRATEGY STATISTICS
Source: Theta Research, February 28, 2019
Average % of Account Traded Each Trade
Average % of Time 100% in Money Market Funds
Beta (Measure of the strategy's volatility in relationto the S&P 500 Index
VERIFYING THE PERFORMANCE
The best way to view credible investment performance is to use an independent third party data reporting service that reports data from actual live accounts of investment advisors operating with actual money and with appropriate deduction for fees. The service we use, Theta Research, is based in Austin, Texas. Theta is completely independent and has a daily data feed from actual live accounts. They measure and report the kind of investment metrics which many investors desire.
Very few investment advisors or financial professionals publish their results. There are various third party data reporting services whose purpose is to publish investment results. Regulatory agencies, such as FINRA and the SEC, allow data to be published as long as the data is accurate and contains proper disclosures. As you think about the opportunity to see verified investment performance, the question emerges: Why would an investment management firm have concerns about an investor seeing their investment performance verified?
Theta Research provides access to live account performance via a complimentary Guest Pass. The guest is provided access to the performance tracking of the strategies used by Reppond Investments, Inc. as tracked by Theta. Upon request, the investor is given a 5 day pass and has the option to renew it without charge for two more 5 day periods. For more information, go to the Low Volatility Strategy and view the tabs “Daily Statistics” and “vs. Benchmark”.
WHAT IS THE GOAL OF THE LOW VOLATILITY STRATEGY?
The primary goal of the Low Volatility Strategy is to significantly lower risk of investment losses relative to the S&P 500 Index over time. A secondary goal is to achieve an acceptable rate of return for the investor.
HOW DOES THE LOW VOLATILITY STRATEGY WORK?
When risk increases for a given stock market index, the funds used by the Low Volatility Strategy tend to be rotated out of that index and are moved partially or fully to money market funds. As risk indicators diminish, the client’s money is migrated back into greater market exposure – either partially or fully.
This approach of investing in major stock market index funds versus the use of money market funds is continually reviewed with the goal of optimizing rate of return while attempting to minimize risk. The strategy is constructed such that it operates in this way during all market conditions. This strategy uses technology and is driven by a computerized, mechanical formula-driven approach which allows investment choices to be guided without any emotional component.
WHICH FUNDS ARE USED?
Investment funds track either a major stock market index or a market sector. We believe that it is most beneficial to the client to use funds without transaction fees and without short term redemption fees. We also prefer to work with fund families with a broad enough offering to accommodate the fund choices we tend to make.
Guggenheim (formerly Rydex) Funds and ProFunds are the fund families that best meet our criteria for the Low Volatility Strategy.
Reppond Investments, Inc. uses two forms of investment management. One is passive (buy-and-hold) investing, which requires less hands-on management time and for which we charge lower fees. Our maximum fee for passive investing is 1% per year – billed quarterly and our minimum investment is $100,000 per household.
The second form of investing is active management. Active management requires continual adaptation of investment strategies to current market conditions while monitoring stock market activity. The goal of active management is minimizing market exposure during periods of increased risk. The maximum fee for active management is 1.5% per year – billed quarterly with a minimum investment is $100,000 per household. Buy-and-hold investments and those using active management may be combined for determining the minimum.
We do not charge or accept commissions nor do we receive any other form of compensation beyond the explicitly stated fees above.
We believe that what really counts in investing is the NET rate of return (after fees) and the amount of risk taken to achieve that rate of return.
See what investment strategy is best for you.
Also available are moderate and aggressive strategies, which use the same methodology, except have a higher degree of market exposure – when the strategy is invested in the stock market. Details on these additional strategies are available by contacting Ben Reppond.