Plan of Participation

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Steve: Investment management begins with investing philosophy. Some of the bedrocks of ours include risk management, diversification, and participation. Not only do we seek to own a variety of good ideas for diversification, but also to avoid missing opportunities. Long-term clients may not realize it, but we have missed very few opportunities through the years by recognizing the differences between actual versus apparent opportunities.

But there is also a difference between participating versus over-participating. It may surprise some to know that less than a dozen companies within the S&P500 index account for most of its YTD performance. Clients can have confidence that they own each of those trending companies, albeit within reasonable limits.

Jordan: “Measured” is one word that comes to mind. Another is “intentional”. We want to know what we own, why we own it, and how much is prudent in each client circumstance. And this is happening in an ever-changing capital market and economic environment. A good example of how this plays out in our sector model is being able to tactically alternate between “cap-weighted” versus “equal weighted” funds.

Steve: As this is being written, the bond market seems to be foretelling an imminent recession while the stock market implies nothing but blue skies ahead. Our plan of participation, overlayed upon each client’s personal financial plan, strives to accommodate either outcome. Risk awareness and management bolsters our confidence in our portfolios.

Jordan: That, our willingness to learn, and our vigilance in differentiating between legitimate information versus hype. Our investment philosophy embraces the principles of risk management, diversification, and measured participation. By staying intentional in our decision making and paying attention to the dynamics of the market, we aim to take advantage of opportunities while carefully navigating potential risks.

The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material, is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Any opinions are those of Steve Gideon and Jordan Dowers and not necessarily those of Raymond James. Past performance may not be indicative of future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor’s results will vary.