Portfolio management strategies attempt to remove the insurance cost of the bond component by actually managing the portfolio in time.
Most portfolios are frozen or time fixed and do not change. These are called buy-and-hold and typically have 60% invested in equity (like S&P500) and 40% in bonds. The problem with buy-and-hold is that the investments do not change as the markets change. One of the many reasons why advisors set up such portfolios is that they do not understand that the markets always change in time. Historically a 60% equity and 40% bond composition does reasonably well over 4 to 20 years to keep client long term returns in the 4 to 8% return yearly area with a low level of draw-down. An obvious problem is that generally equity returns are higher than bond returns so the bond portion is a drag on performance. Thus, the bond component is like an insurance policy and the under performance of bonds is like an insurance cost needed to smooth out performance. Further in bear markets like 2008-2009 these buy-and-hold portfolios lost a lot of money and had high maximum draw-downs (20 to 60%) and the concept of buy-and-hold portfolios lost credibility. Additionally, the 1951 “modern portfolio theory” portfolios are actually buy-and-hold and also lost a lot of money in 2008-2009 and therefore also lost credibility. Exchange Traded Funds (ETF) investing has replaced some buy-and-hold money but to be effective the portfolio manager needs to understand changing markets and employ strategies; this leads to professional portfolio management as it is generally beyond even sophisticated individual investors skill level. Furthermore frequent trading of ETFs is very costly due to slippage.
Our Strategies
At Harloff
Dynamic Portfolio Mangment
Our Dynamic Portfolio Management employs our own statistical analysis of the world markets (mutual funds) to compute “optimal” portfolios in terms of maximizing return and minimizing risk. This strategy is sometimes called Tactical Asset Allocation and we prefer to call it Dynamic Portfolio Management. Our computer mathematical model began in early 1990. Our University Beta Strategies are mathematical models of long or short one index at a time including: (1) S&P500, (2) US Government 10 year bond, (3) US High Yield bond, (4) Energy, (5) Gold, (6) Emerging Market, and (7) US Dollar. We employ the same computer program to determine if the portfolio should be long or short each index. Other portfolio managers are unable to do this because of the inherent index differences and differing volatility of the different markets or indexes. We also offer blends of these different strategies that increase diversification.
Harloff Capital Partners, L.P., Hedge Fund
Our Harloff Capital Partners strategy is a limited partnership offered to qualified investors where Harloff Capital Management is the general partner. It is a hedge fund and employs a wide latitude of investment vehicles. We developed a Call-Put Options mathematical model in the early
It may employ long, inverse, leveraged, equity and bonds with changing asset allocation depending on market conditions. This strategy was developed by Ph.D. Gary J. Harloff.
For more information about our Harloff Capital Partners
University Beta Strategies®
University Beta(c) strategy employs leveraged equity and bond positions that change with position in the nominal 4-year investment cycle. Long and inverse funds and ETFs may be employed. This strategy was recently developed by Ph.D Gary J. Harloff.
A presentation is available from the links page.
- Asset allocation changes with investment cycle
- Performance and disclosure from links page.
For more information about University Beta Strategies, contact Harloff Capital Management (phone: 440-871-7278) or read more on our Financial Investing Blog.
- Investing discussion after determining investor is accredited.
- Investing discussion after delivery of individualized Confidential Offering Memorandum.
Example of University Beta Strategies®
