Simpson Capital (SCM) provides investment management and consulting services for your personal and institutional client portfolios. An investment philosophy is
- a coherent way of thinking about markets
- how they work
- the types of mistakes investor behavior
Thusly, The investment philosophy used to offer these services for you has been developed over the three decades of our founder/CEO’s career. Capital markets are markets for buying and selling equity and debt instruments.
- Primary markets where new stock and bond issues are sold to investors
- Secondary markets, which trade existing securities.
The way new public information is processed makes them modestly efficient . But re not perfectly rational.
SCM believes can exploit short-term inefficiencies but eventually the fundamentals win out as the market embraces reality and gets it right in the long-term. Below is a discussion of how SCM integrates these characteristics in managing your portfolio.
Humans and Markets Aren’t Perfect
In many of our life decisions, we don’t always make the best choice. Buy/hold decisions in capital markets are no different.
- In the first place, don’t have all the facts
- also, hold pre-deposed biases
- not to mention don’t prioritize the critical factors
The Challenge
- compile known facts
- account for the randomness of new info being revealed
- assess the rationality of the market’s collective actions.
SCM approaches this challenge by gathering data from a variety of sources and observing markets. Once the data is compiled, SCM forms an opinion on where the herd is headed in the short-term.
There are roughly six times a year when the market makes odd dips and spikes, usually triggered by outside events such as 9-11 or the Brexit vote. SCM uses these events to go against the grain to pick up extra return. At these moments, SCM adjusts the holdings by buying on the dips and selling into rallies.
- Visit our Research page to learn about SCM’s capabilities
- To learn where the herd is headed next see our SCM Market blog .
Fundamentals Drive Markets in Long-term
It is not possible to ‘time the market’ over the long-term. When the facts are known and widely held, markets sort out the excesses and become normal. Therefore, SCM has built models and matches the profiles of these models to your profile. SCM’ is fully invested at all times and changes when your needs change.
Outside factors such as market action or cash transfers often cause changes to your holdings versus your targets. Therefore, your holdings are re-balanced to narrow gaps when it moves away from targets. Correspondingly, this ensures buying low and selling high. Visit our Portfolio Strategies page to learn more about these models.
Theory into Practice
SCM uses a ‘top down’ approach to selecting your issues. Thus, SCM prepares forecasts of the future market environment and employs SCM’s model based on price, forward looking earnings and long-term growth rates. Furthermore, your security selections are structured with a ‘buy and hold’ objective.
Equities selected based on
- quality
- market growth
- market leadership
Therefore, emphasis is placed on mid-cap companies for return and large-cap companies for strength while structured with S&P500 sector weights.
Fixed income holdings including money markets are selected for your needs based on credit quality and interest rates. Factors used to make your first decisions may change over time. Therefore, trade is made when the outlook for an issue outside your holdings is brighter than your existing outlook.
SCM’s Investment Philosophy uses market patterns to build a plan for you. Visit Our Services section to learn more about how SCM can apply our investment philosophy to your holdings.
