On Thursday Salt Creek Investors (SCI) will be hosting a call for any advisor interested in learning more about our platform and our partner Sortino Investment Analytics (SIA). I invite anyone who has ever considered using or used third party managers to take time on Thursday to learn about our process and methodology. The need for a disciplined quantitative and qualitative approach to investing is critical at a time when political uncertainty and market valuations are very high. SCI provides a rules based approach to manager selection using both quantitative and qualitative analysis that removes many of the biases that are often a part of the investment decision process.
This week will be a busy week for economic reports. Sandwiched in between the ISM report on Monday and the jobs report on Friday are details of truck and auto sales for December and FOMC minutes from the December meeting. Pay attention to the hourly and weekly earnings on Friday as they’re good indicators of where consumer spending is headed.
As expected the SCI portfolios had little direction last week. The buzz of Dow 20,000 fizzled as most traders decided to spend their time somewhere else. A smart decision for sure. I’m watching bond yields today for their reaction to what appears to be a strong start to the market. Asset allocation strategies are designed to take advantage of non-correlation of different asset classes. SCI is no different. The ’08-’09 crisis showed us the risk in asset allocation when asset classes move in sync. What makes SCI unique is its methodology that distances itself from MPT (Modern Portfolio Theory) with the adoption of PMPT (Post Modern Portfolio Theory), a belief at the core of our process. It adds a third dimension to the well discussed mean-standard deviation characteristic of MPT by placing significant importance on downside deviation. Clients, believe it or not, also think this is important. We’ll talk about this more in the future and how it works in the SCI portfolios. Jim Kaffen of SIA is very knowledgeable on this topic and will be speaking about this on Thursday. The call will be an excellent chance to become more familiar with SCI. I hope you’ll join us then. Thanks again for your support and the effort you make in helping your clients achieve their goals.