HOW OUR APPROACH IS DIFFERENT
While other advisors speak of their “approach,” we view our investment philosophy more like a “process” – a multifactor process. We believe that balancing your financial objectives while maintaining the proper risk tolerance involves an ongoing conversation. As such, your ultimate portfolio allocation will be solely determined on risk parameters and financial objectives that are catered for what is best for YOU. So, what is really different about L&L?
We believe that the initial conversations you have with us may be similar to other advisors but our plan, and especially the execution of it, will be where we differentiate ourselves. Our process is tactical, dynamic and involves multi asset allocation. At L&L, instead of simply deciding on a passive allocation mix and sticking to it., we tactically adjust portfolio weightings based on economic cycles, rate of change expectations, market psychology and technical analysis. These tactical asset changes are implemented with the goal of generating superior risk-adjusted returns compared to a more typical static asset allocation approach. For example, if our research suggests that bonds or cyclical stocks are expected to outperform, why keep a passive predetermined allocation in those assets? Why not increase client exposure and actively manage risk? If our process expectations are for a tough environment in equities then we will dynamically reduce allocations to protect and manage risk during a possible downturn.
Multi asset allocation is also a part of the DNA of L&L. While most allocators simply look at portfolio management as a binary choice between bonds and stocks, we actively diversify through alternative assets such as gold, commodities and digital assets. We don’t have automatic allocations to such assets but tactically allocate to these alternatives when the process cycle signal is positive. For example, if our research suggests that energy or gold are expected to outperform, why not increase client exposure and actively manage risk? If our process expectations are for a tough environment in alternatives then we will dynamically reduce allocations to protect and manage risk during a possible downturn.
Like in life, the economy and financial markets have their cycles of ups and downs. Our process is geared towards anticipating and befriending volatility to maximize returns and manage risk more appropriately. In 2020 we did not forecast the Covid Pandemic, but we were expecting a slow down in the rate of change of earnings growth, and a consequent market shift. The result was not only a superior performance but improved risk management and a consequent reduction in account volatility.