Our Strategic Advantage
The edge you will get with Paisley Financial lies within our strategic design to Capital Management. Our Trilateral Active Management approach is our optimal way to achieve maximum diversification & growth, as it encompasses all of our active management capabilities into a single, engine.
Active Strategic Management
- Growth Strategies
An aggressive portfolio strategy mostly comprised of our top growth stocks which aims to maximize capital growth. Risk is typically managed through the use of a well-diversified stock portfolio.Learn More
Strategies that attempt to achieve growth but is averse to taking on large amounts of risk by tilting towards stocks, up to 60%. Growth is placed as the primary emphasis and current income as their secondary emphasis though may change depending on prevailing market conditions.Learn More
An amalgam of fixed income & short term revenue generating instruments that are focused on low risk objectives. The investments sought are of a high yield with a steady dividend history. Option strategies may be use to grind out additional gains or to work as a volatility hedge.Learn More
Hedge Fund Style (Long/Short)
Our Trilateral Active Management approach is our optimal way to achieve maximum diversification & growth, as it encompasses all of our active management capabilities into a single, engine. The strategy incorporates all of our fixed income, currency, equity and commodity trading strategies we have developed into a model that will ebb and flow with volatility, growth, recessive interruptions or trends and all invested in a securities-only product.Learn More
Active versus Passive Management
Active management is the art of stock picking and market timing. Passive management refers to a buy-and-hold approach. Buy and Hold worked well enough until 2008 when the DOW dropped 37% and has still not recovered. To understand the right choice for you, please learn more below.Learn More
Passive or index managers - the terms are often used interchangeably - make no forecasts of the stock market or the economy, and no effort to distinguish "attractive" from "unattractive" securities.
A passive manager investing in large domestic stocks, for example, makes no determination if Ford is preferable to General Motors, Coca-Cola to Pepsi, or Campbell Soup to Kellogg. Instead he or she simply buys every large company from Abbott Labs to Zion’s Bank, resulting in a portfolio with hundreds of stocks. Once assembled, turnover is very low since every stock is intended to be held indefinitely. Portfolio adjustments are made only in response to fundamental changes in the underlying universe of stocks - when CBS disappears in a merger with Westinghouse, for example, or a new company such as Google joins the ranks of large company stocks.
Passive managers often construct their portfolios to closely approximate the performance of well-recognized market benchmarks such as the Standard & Poor’s 500 index (large U.S. companies), Russell 2000 index (small U.S. companies) or Morgan Stanley EAFE index (large international companies).
So what are the pros and cons of Passive management?
On the positive side brokerage costs are typically lower because transactions are fewer. Taxation tends to be lower because of the low turn over and there is also the advantage of Long Term Capital Gains Tax which may or may not be apportioned in an active program. Investment Manager fees may be lower do to less interaction. If used this strategy anytime in the 80's or 90's you probably had solid returns.
On the negative side, if you set up a program that mirrored the S&P 500 Index and started on January 1st of 2000, as of August 1st 2010 you basically had a zero return for your time. Also, if you purchased a basket of stocks that mirrored the NASDAQ in 2000 you are still down by 60% 12 years later with little hope to get back to zero for another decade or more.
There are virtues to passive management, but like with anything successful, timing is everything. There are times when buy and hold is an excellent strategy and other times where it allows you no downside risk protection. Talk to a Paisley Advisor and they can help you determine that right strategy for you.