Why Fair Weather Strategies?
INDEPENDENT BY DESIGN
The firm was set up as an independent registered investment advisor based on the belief that it is that structure which most closely aligns’s the interest of the firm’s clients with the firm.
Being independent, Fair Weather Strategies is completely unencumbered in selecting what the firm believes are the best investment vehicles for its clients.
What Is It?
The firm adopted it’s trademarked “Fair Weather” Investing strategy only after years of diligent research into strategies that have been scientifically measured as having worked historically. The firm does not accept conventional anecdotes as to what works until those theories have been quantitatively back-tested and analyzed.
This research culminated in the publication of the whitepaper, Testing the Simple Moving Average across Commodities, Global Stock Indices, and Currencies, in the Journal of Wealth Management. This paper was inspired in great part by Mebane Faber’s research into long-term moving averages, as outlined in his 2009 whitepaper, A Quantitative Approach to Tactical Asset Allocation.
The implications of this strategy are that at times, the firm’s portfolios can be heavily weighted towards cash, increasing the probability that portfolios will be less volatile than had the firm simply bought and held those funds.
Some portfolios traded using a disciplined momentum strategy have at times shown greater resilience in economic downturns than portfolios traded using a buy and hold strategy. This is an important consideration for individuals that seek to complement their passive or buy and hold investment strategies with a more tactical, active approach.
Past performance is no guarantee of the future, of course.
Past performance is no indicator of future return. There is no guarantee that applying any momentum strategy will either increase your portfolio’s return or lower its volatility as compared to any other strategy. Some securities and market environments are particularly unsuitable for trading using a momentum strategy. Active investment strategies will likely incur higher commissions than a buy and hold strategy and may or may not increase your taxes relative to buying and holding.