Dightman Capital has extensive experience managing investments. This experience has led the firm to develop an approach it believes provides the best of both worlds when it comes to investing in stocks and bonds. That is, the ability to participate in market growth while attempting to avoid the severe and sustained downturns that periodically inflicts damage on investors wealth.
We offer two primary investment strategies designed to meet a wide range of investor portfolio needs and more importantly, the strategies are designed to work together to smooth the return stream for investors:
Adaptive Growth, which incorporates a simple timing-based system and has consistently shown an ability to avoid sustained market declines, automatically adjusting from an aggressive or moderate allocation to a conservative allocation depending on market conditions.
Market Growth strategies are designed to move with the market and can incorporate an aggressive to conservative investment mix. This strategy incorporates focused investments in a carefully constructed mix which has historically delivered an attractive risk/return ratio.
Rebalancing at the Strategy Level
Rebalancing usually takes place within an account between investments. When you have different investment strategies you can rebalance between accounts (within the same tax status) or be more opportunistic regarding which account you generate income for retirement needs. Our straight forward dual-strategy investing is a simple way to potentially add another level of diversification to your investment management approach.
In addition to portfolio strategies we manage for clients, we may also provide a variety of custom solutions for unique client needs as necessary.
Our investment philosophy is quite simple. We are attracted to the process of capital allocation for the purpose of participating in business expansion.
However, we believe the standard method for managing risk falls short when it comes to serving individual investors, primarily because the illustration used to demonstrate risk uses a form of math (normal distributions) that is not consistent with the return stream of stocks and bonds (non-normal distributions). The potential for a decline of 35% or more from a mix of 60% stocks & 40% bonds over a multi-year period is entirely unacceptable for many investors during retirement and can take years to rebuild for those accumulating wealth.
Our goal is to bridge the gap between managing risk and participating in growth investments. We attempt to accomplish this by deploying multiple investment strategies. Some strategies maintain market exposure through up and down cycles with various degrees of expected volatility; our timing-based strategy is designed to avoid sustained market declines altogether.
When combined, we believe we have a set of investment strategies that work well together.
Ultimately supply and demand determine stock and bond prices. Earnings are the number one factor driving stock market supply and demand; interest rates are the primary (but others apply) driver of bond market supply and demand. Both stocks and bonds are heavily influenced by credit conditions. Within this framework much of the price movement in stocks and bonds can be explained.
Short-term movements are unexplainable but longer-term market cycles can be forecasted. Bear market often begin after the market has experienced a period of expansion with everyone feeling good. Bull markets often take off when an economy is in a recession and investors are scared. It is these investing conflicts that lead investors to use Dightman Capital to help them navigate their way through investing challenges.
Investing is about checking your emotions and managing risk. We can’t know the future with certainty but we can build a strategy that is designed to deal with a variety of outcomes with the goal of delivering a superior risk-adjusted return.