“Bottom up” is far simpler than “top down.”
Our process is completely “bottom up.”
Our experience has taught us that trying to forecast short to medium term economic fluctuations is impossible. Trying to understand the social and political events that influence economics is likewise too difficult to forecast. That does not mean we “stick our heads in the sand”, and ignore the economic news of the day. We might also have strong long-term opinions about the future of the US and world economies.
But we work very hard each day to not let any short-term noise, or long-term opinions, influence the stocks we select for the model portfolio. Never, never, never do we think: The dollar might be weaker so let’s buy drug stocks, or the economy is picking up let’s buy Caterpillar.
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