Our Philosophy and Approach
The Two Traditional Approachs:
Buy and Hold, or Tactical and Nimble

We believe that there are two traditional types of investing approaches an advisor could take. Those who follow a traditional buy and hold allocation method and believe they can pick the best funds for each asset class, rebalance to a fixed allocation, and revisit it from time to time. We do not believe this approach can be sustainable through investment cycles. Then there are those that say, we are tactical and nimble. They tell you when to increase or decrease certain allocations based on their analysis and outlook. There are several challenges with this approach:

Efficiency falls. With a significant increase in trading required with tactical shifts comes an increase in resources required to implement the strategy, which weighs on overall efficiency.

Increased exposure to compliance issues. When an advisor gets a trade signal from a tactical OCIO, that trade needs to occur in a timely fashion across portfolios, otherwise, the model is not being followed and may not be compliant.

Inflexible. When the financial advisor is the tactical portfolio manager, how does that advisor ‘fire’ themself? Flexibility to replace or swap a manager or strategy should always be an option.

Our Multi-dimensional Approach

We believe there is no perfect allocation style or discipline. At different moments, any given style or strategy can underperform or outperform expectations. Moreover, we do not believe alpha is created by picking the best fund for each ‘style box’, and then allocating to a fixed-static allocation. We take a multi-dimensional approach by blending different disciplines and styles to provide investment returns that are less contingent on market movements. Our Multi-Dimensional Asset Allocation model portfolios create the optimal mix of asset classes, investment strategies and styles that maximize risk-adjusted returns by utilizing Strategic, Tactical and Alternative allocation styles and leveraging Quant, Fundamental and Technical disciplines.

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Simplifying Investment Complexity

What’s more, we believe investment advisors should not be making major tactical portfolios shifts by themselves. That should be left to experienced and proven portfolio managers.

We create asset allocation recommendations using our multi-dimensional approach tailored to specific clients. The portfolios are implemented with investments that have passed our exacting standards. We provide you with ticker symbols and position sizes, so you can efficiently implement the portfolio solutions across your practice.

The investments chosen are for specific purposes in the portfolio. Many of the funds we select are designed to be flexible and tactical, so the advisor does not need to be actively trading to achieve targeted returns and risk levels.

As we closely monitor the dynamic investment environment, we make ongoing recommendations to adjust allocations and/or replace investments.

After the initial implementation, the results are less trading, more tax efficiency, and more ‘dynamic alpha.’

Dynamic Alpha Solutions Multi-Dimensional Asset Allocation portfolios, investment complexity simplified. Request a Consultation
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