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affordable
sophisticated
unbiased
Investment Philosophy
At Buy Point, we think life is too short to have to fret over portfolio losses, the state of
the economy, the "geopolitical situation" or whether interest rates will rise and corporate
earnings grow at 5% instead of 10% next year. And by the way, life is also too short to
watch CNBC more than a couple hours per week ! Putting your investing on auto pilot
with a sound long term plan is in the end much more rewarding to your financial
well-being and your health than constantly trying to hop on " the next big thing"
predicted by analysts-promoters and other gurus desperately competing for your
attention.
Buy-Point.com and its advisory services do not seek to predict future returns, or the
extent of a trend for a particular asset class. It is the founder's belief, based on more
than a decade of hands-on market experience, that accurately predicting trends far out
in the future and timing investments based on those predictions so as to consistently
avoid large drawdowns or periods of relative underperformance is impossible.
What can be identified however is extremely oversold or overbought situations
as well as developing price trends. Extremely oversold situations in equities, for
example, often constitute buy points upon which an investor can easily take action
without having to predict the extent of the market gains.
Since price contains most of the information necessary to identify extremes and trends,
emphasis on the study of largely after-the-facts macro-economic trends and deceptive
company financials in order to try to predict the next best performing securities is
pointless in the grand scheme of things. So is the over-analysis of a myriad of technical
and sentiment indicators. That is any of these studies will not allow an investor to
consistently predict the future and extract superior returns over a long period of time
(and any of these studies could lead the investor to under-allocate to a particular asset
class and severely underperform a more diversified portfolio). Much more important to
an investor is a good asset allocation and the discipline to stick with a long term plan
even in the face of geopolitical or financial crises .
For the conservative investor with a long term horizon, Buy Point advocates long term
buy-and-hold investing within a widely diversified portfolio and some tactical positioning
to increase exposure to equities when what we believe constitutes a major "buy point"
is identified or conversely to decrease exposure if for example personal circumstances
(retirement approaching) combined with increasing risk for equities warrant it or a bear
market is developing. More aggressive investors interested in actively managing their
portfolio can also allocate up to 30% of their portfolio (20% is recommended) to the
medium term and short term investments recommended by Buy Point.
What are those medium term and short-term investments?
These short-term investments typically exploit short-term and medium-term reversals
and trends in equities, bonds, foreign exchange, commodities and gold. The investment
vehicles of choice are easily accessible and low cost exchange traded funds (ETF's) or
spot FX for the currency market but of course sophisticated investors can use the
futures market. The objective is to always keep drawdowns low through appropriate
position sizing, stop orders may also be placed often within 2% of the entry point,
10-15% for individual stocks. The majority of trades last less than 3 weeks, sometimes
just a few days. Medium term trades can last from a few weeks to a few months, more
rarely a few years for long trades in broad stock indexes or an individual stock.
The short-term trades produce returns that historically have had a low correlation to the
return of equities. Since the returns on that part of the portfolio are not highly correlated
to the equity portion of the portfolio, overall returns will suffer less volatility while
generally being superior . Some trades involve options and carry a higher degree of risk
and are only suited to more sophisticated investors with practical knowledge of option
trading .
These strategies aim to produce an annual return of 10-20% with very low volatility and
constitute an ideal diversifying component to an aggressive portfolio.
In addition, Buy Point will occasionally recommend individual stocks with a potential for
high capital appreciation (20 to 200%) within the next 24 months. These stocks are
extremely volatile securities and even though Buy Point entries will always keep risk low,
you should never invest more than 10% of your overall portfolio in any of these
recommendations. The unused portion of the funds you allocate to trade Buy Point
recommendations should be placed in an interest bearing account or a money market
fund that Buy-Point.com will recommend.
It should be stressed that the trades recommended by Buy-Point.com should be part of
an otherwise traditionally managed and well-diversified portfolio. The medium-term
timing signals on broad stock indexes should be used to increase or reduce (via
rebalancing for ex.) that exposure to equities. Unless as a hedge in special circum
-stances, Buy Point will not recommend to short equities: sell signals on equities should
only be used to reduce exposure or execute an option strategy. Buy Point recommends
to keep trading losses under 1.5% of the total portfolio. Buy-Point.com offers a choice of
long term buy-and-hold and tactical portfolios with specific fund recommendations to
allow subscribers to easily and quickly build a portfolio from the ground up .
At Buy Point, we think life is too short to have to fret over portfolio losses, the state of
the economy, the "geopolitical situation" or whether interest rates will rise and corporate
earnings grow at 5% instead of 10% next year. And by the way, life is also too short to
watch CNBC more than a couple hours per week ! Putting your investing on auto pilot
with a sound long term plan is in the end much more rewarding to your financial
well-being and your health than constantly trying to hop on " the next big thing"
predicted by analysts-promoters and other gurus desperately competing for your
attention.
Buy-Point.com and its advisory services do not seek to predict future returns, or the
extent of a trend for a particular asset class. It is the founder's belief, based on more
than a decade of hands-on market experience, that accurately predicting trends far out
in the future and timing investments based on those predictions so as to consistently
avoid large drawdowns or periods of relative underperformance is impossible.
What can be identified however is extremely oversold or overbought situations
as well as developing price trends. Extremely oversold situations in equities, for
example, often constitute buy points upon which an investor can easily take action
without having to predict the extent of the market gains.
Since price contains most of the information necessary to identify extremes and trends,
emphasis on the study of largely after-the-facts macro-economic trends and deceptive
company financials in order to try to predict the next best performing securities is
pointless in the grand scheme of things. So is the over-analysis of a myriad of technical
and sentiment indicators. That is any of these studies will not allow an investor to
consistently predict the future and extract superior returns over a long period of time
(and any of these studies could lead the investor to under-allocate to a particular asset
class and severely underperform a more diversified portfolio). Much more important to
an investor is a good asset allocation and the discipline to stick with a long term plan
even in the face of geopolitical or financial crises .
For the conservative investor with a long term horizon, Buy Point advocates long term
buy-and-hold investing within a widely diversified portfolio and some tactical positioning
to increase exposure to equities when what we believe constitutes a major "buy point"
is identified or conversely to decrease exposure if for example personal circumstances
(retirement approaching) combined with increasing risk for equities warrant it or a bear
market is developing. More aggressive investors interested in actively managing their
portfolio can also allocate up to 30% of their portfolio (20% is recommended) to the
medium term and short term investments recommended by Buy Point.
What are those medium term and short-term investments?
These short-term investments typically exploit short-term and medium-term reversals
and trends in equities, bonds, foreign exchange, commodities and gold. The investment
vehicles of choice are easily accessible and low cost exchange traded funds (ETF's) or
spot FX for the currency market but of course sophisticated investors can use the
futures market. The objective is to always keep drawdowns low through appropriate
position sizing, stop orders may also be placed often within 2% of the entry point,
10-15% for individual stocks. The majority of trades last less than 3 weeks, sometimes
just a few days. Medium term trades can last from a few weeks to a few months, more
rarely a few years for long trades in broad stock indexes or an individual stock.
The short-term trades produce returns that historically have had a low correlation to the
return of equities. Since the returns on that part of the portfolio are not highly correlated
to the equity portion of the portfolio, overall returns will suffer less volatility while
generally being superior . Some trades involve options and carry a higher degree of risk
and are only suited to more sophisticated investors with practical knowledge of option
trading .
These strategies aim to produce an annual return of 10-20% with very low volatility and
constitute an ideal diversifying component to an aggressive portfolio.
In addition, Buy Point will occasionally recommend individual stocks with a potential for
high capital appreciation (20 to 200%) within the next 24 months. These stocks are
extremely volatile securities and even though Buy Point entries will always keep risk low,
you should never invest more than 10% of your overall portfolio in any of these
recommendations. The unused portion of the funds you allocate to trade Buy Point
recommendations should be placed in an interest bearing account or a money market
fund that Buy-Point.com will recommend.
It should be stressed that the trades recommended by Buy-Point.com should be part of
an otherwise traditionally managed and well-diversified portfolio. The medium-term
timing signals on broad stock indexes should be used to increase or reduce (via
rebalancing for ex.) that exposure to equities. Unless as a hedge in special circum
-stances, Buy Point will not recommend to short equities: sell signals on equities should
only be used to reduce exposure or execute an option strategy. Buy Point recommends
to keep trading losses under 1.5% of the total portfolio. Buy-Point.com offers a choice of
long term buy-and-hold and tactical portfolios with specific fund recommendations to
allow subscribers to easily and quickly build a portfolio from the ground up .
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