Our Philosophy

3. Implement the Strategy

At Investor Resources we set out to find a more robust process to protect our clients’ assets while allowing them to grow. After filtering through what seemed like an endless line of concepts and theories we came down to the one that made the most sense, it is called Relative Strength.

Simply stated, relative strength is “best by test.” Relative strength has been around for over seventy years. Investor Resources didn’t invent it, but we think we have refined it into a powerful tool for portfolio management. It is based on a very familiar concept, supply and demand.

Using multiple Exchange Traded Funds (ETF) portfolios have an inexpensive way to access major asset classes; Domestic Equities, International Equities, Commodities, Currencies and Fixed Income. Relative Strength analysis is completed daily to determine which of these major asset classes are in the strongest positive trend. The asset classes are then ranked from the strongest to the weakest. Next, each asset class is compared to the trend for three month Treasury Bills. Portfolios are constructed using only those asset classes that are the strongest performers and are out performing the Treasury Bills.

“…the key to good performance is the ability to identify those stocks that are detracting from the performance of the portfolio. Most portfolio managers spend most of their time and effort trying to find the next big winner in the stock market but good portfolio performance depends more on finding and eliminating the bad stocks from the portfolio.”

Fundamentally, we do not recommend investing in assets that rank lower than Treasury Bills, our proxy for money markets or cash accounts. Our portfolio objective in declining markets is to preserve an account's value until assets once again establish a positive bias in price trends. From time to time, it is important to treat cash as an acceptable asset class which is generally not acceptable with traditional pie chart investment allocation models.

What you should know before starting to search for or select a certified, reputable financial advisor? Click through and review our approach for valuable tips and more details on what makes Investor Resources unique and why we should be your choice for financial planning.