Upside “Un” potential
“Price is what you pay. Value is what you get.”
Good active managers are hard to find. And it may be getting harder. Even one of the best, Warren Buffett, seems to think the same. A trust set up for his wife will be invested 90% in the passive market and 10% in government bonds. I guess he just didn’t have the time to teach Mrs. Buffett the nuances of stock picking. The best active managers have the tools to invest both offensively and defensively. They have the skill to navigate inflation, deflation, stagflation, rising and falling interest rates, good or weak economic activity, and the Federal Reserve. No easy task. In an investing world where irrational behavior is prevalent, recognizing the ebb and flows of human behavior presents an ongoing challenge.
With the advancement of big data and technology, much (but not all) of the alpha generating informational inefficiencies in the marketplace have been eroded and are now looking more and more like beta. This will continue. Even the risk premia for smart beta will soon become broad and persistent as the number of benchmarks for comparing these factors are growing. Delivering alpha within an acceptable range of risk in order to justify the cost will be the key for active managers to survive. At SCI we believe it’s possible. By relying on extensive amounts of data to perform our analyses, we’re screening for those managers that have high probabilities of delivering alpha with low probabilities of downside capture. But we’re not ignoring costs.
We’re cognizant of this issue and continue to strive to bring to you and your clients the best managers within a range of expenses that will deliver value. Our strategy is sound and time tested. Consistency is the key, discipline is the driver. Active management remains and will remain a challenge but we’re confident through our partnership with Sortino Investment Analytics, that your clients will be getting what they pay for.
As you consider the information provided with the Salt Creek Investors Asset Allocation Platform (the “Program”), please review the following:
The information and descriptions provided about the Program are for educational and information purposes only and should not be used or construed as investment advice, an offer to sell, a solicitation of an offer to buy, a recommendation for any security, or suggest any course of action. LaSalle St. Investment Advisers (“LSIA”) does not guarantee that the information or descriptions supplied about the Program are complete or timely. LSIA makes no warranty with regard to any results obtained from the Program or its deployment. LSIA is not responsible for any direct or incidental loss incurred by relying on information provided about the Program. The allocations presented herein are illustrations and completely hypothetical. None reflect actual investments or investment results and do not reflect allocation of any individual portfolio. Asset allocation and its results vary over time. Other allocations or asset investment categories not offered in the Program may have characteristics similar or superior to those illustrated. Past performance of any model or allocation is no prediction of future results. Neither the Program nor any system/model can predict the future of any market or price movement in a market. Diversification and asset allocation do not guarantee against the risk of investment loss, including risk of loss of principal. Information provided regarding the Program is as of the date of publication and may change at any time without notice. Information has been included which was obtained from third parties and is believed to be reliable and complete. LSIA does not warrant the accuracy or completeness of such information. LSIA is a registered investment advisor and does not provide tax, accounting or legal advice ‒ the information and/or descriptions provided do not constitute such advice. More information regarding LSIA and its investment strategies can be found in the LSIA brochure, ADV Part II, which is available online or through LSIA. Asset allocation may not be suitable for all investors. Before deciding to invest, potential participants should consult with an investment adviser to determine an appropriate investment strategy and methodology which meets the investor’s specific financial needs, objectives, goals, time horizons and risk tolerance. The information and description provided herein has been made without consideration of any investor’s particular suitability for investing in the Program. Asset allocation also involves investment in various asset classes which are not insured by the government. Investing in fixed income and/or high yield securities involves additional concerns including interest rate risk, credit risk and reinvestment rate risk. Investing in securities outside the United States may entail greater risk than investing in domestic U. S. markets. These risks typically include political and economic uncertainty of foreign countries as well as currency exchange fluctuations, including foreign currency exchange rates, political risks, different methods of accounting, financial reporting and foreign taxes. The prospectus accompanying a security should carefully be reviewed before investing. The services described herein are available to persons residing in any state where they would otherwise be contrary to local law or regulation.
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