O
UR MANAGEMENT STYLES


SCMI manages accounts according to several distinct management styles, which are described in the text below. A personal conference with an Account Manager is used to help determine which strategy is most appropriate for each client, based on his or her individual risk tolerance (RT). A graphical overview of these management styles is attached at the back of this brochure.

Very Aggressive (RT = 9)

This management style is our highest risk strategy. In this strategy, our tactical asset allocation system (TAAS) first provides the optimal asset mix suggested by our research for the investor with a very-high risk tolerance (9 on our scale of 1 to 9). Once the optimal allocation of assets is determined, the multifactor equity ranking system (MERS) is used to select the individual equities within the stock asset classes. Exchange traded funds (ETFs) are currently used for any allocations to bond classes due to their low cost and close tracking to their respective indices.

Because this is a very aggressive strategy, it is expected to have very high allocations to our highest-risk asset class (stocks) in most market periods and it is therefore expected to incur larger losses than our less aggressive strategies in its search for larger returns over time. This strategy is suitable for investors who can tolerate very high risk over a multi-year period or for those with a very long time horizon. Investors who are inclined to change strategies during periods of underperformance should not apply for this management style.

Aggressive (RT = 7-8)

This management style is designed to provide the optimal asset mix suggested by our research for the investor with a high risk tolerance (7-8 on our scale of 1 to 9). Once the optimal allocation of assets is determined, the multifactor equity ranking system (MERS) is used to select the individual equities within the stock asset classes. Exchange traded funds (ETFs) are currently used for any allocations to bond classes due to their low cost and close tracking to their respective indices.

Because this is an aggressive strategy, it is expected to have high allocations to our highest risk asset class (stocks) in most market periods and it is therefore expected to incur larger losses than our less aggressive strategies in its search for larger returns over time. This strategy is suitable for investors who can tolerate high risk over a multi-year period or for those with a long time horizon. Investors who are inclined to change strategies during periods of underperformance should not apply for this management style.

Moderate (RT = 5-6)

This management style is designed to provide the optimal asset mix suggested by our research for the investor with a moderate risk tolerance (5-6 on our scale of 1 to 9). Once the optimal allocation of assets is determined, the multifactor equity ranking system (MERS) is used to select the individual equities within the stock asset classes. Exchange traded funds (ETFs) are currently used for any allocations to bond classes due to their low cost and close tracking to their respective indices.

Because this is a moderate strategy, it is expected to have moderate allocations to our highest risk asset class (stocks) in most market periods and it is therefore expected to incur moderate losses in its search for moderate returns over time. This strategy is suitable for investors who can tolerate moderate risk over a multi-year period or for those with a medium time horizon. Investors who are inclined to change strategies during periods of underperformance should not apply for this management style. 

Conservative (RT = 3-4)

 

This management style is designed to provide the optimal asset mix suggested by our research for the investor with a low risk tolerance (3-4 on our scale of 1 to 9). Once the optimal allocation of assets is determined, the multifactor equity ranking system (MERS) is used to select the individual equities within the stock asset classes. Exchange traded funds (ETFs) are currently used for any allocations to bond classes due to their low cost and close tracking to their respective indices.

Because this is a conservative strategy, it is expected to have lower allocations to our highest risk  

asset class (stocks) in most market periods and it is therefore expected to incur lower losses than our more aggressive strategies in its search for more consistent returns over time. This strategy is suitable for investors who can only tolerate low risk over a multi-year period or for those with a short time horizon. Investors who are inclined to change strategies during periods of underperformance may apply for this management style.

Very Conservative (RT = 1-2)


This management style is designed to provide the optimal asset mix suggested by our research for the lowest risk-tolerance investor (1-2 on our scale of 1 to 9). Once the optimal allocation of assets is determined, the multifactor equity ranking system (MERS) is used to select the individual equities within the stock asset classes. Exchange traded funds (ETFs) are currently used for any allocations to bond classes due to their low cost and close tracking to their respective indices.

 

Because this is a very conservative strategy, it is expected to have much lower allocations to our highest risk asset class (stocks) in most market periods and it is therefore expected to incur much lower losses in its search for very consistent returns over time. This strategy is suitable for investors who can only tolerate very low risk over a multi-year period or for those with a very short time horizon. Investors who are inclined to change strategies during periods of underperformance should apply for this management style.


For an appointment to discuss our services, please call (860) 242-6400, or e-mail us at: consensus@spearcapital.com.