Every investor knows there are two primary financial markets, so-called “Bear” and “Bull,” and that historically, these alternate—the former characterized generally by falling prices; the latter by rising prices.
Yet what if these only tell part of the overall story? What if there was a method to apply that could drill down even further, creating a more comprehensive lens to analyze and identify trends, opportunities, and even implications?
New York-based wealth management firm 4Thought Financial Group has developed such a system—breaking these two main traditional markets into four, and creating a whole new way of investment management.
It’s called “Multi-Method Investing®,” the culmination of years of analytics and historical financial market research, and 4Thought Financial Group Chief Investment Officer Jesse B. Mackey has made its full, in-depth explainer available via its website and as a free, downloadable white paper.
Consider this post, therefore, a brief but helpful outline summarizing some of this new methodology’s fundamental principles and key points.
Let’s begin with the basics. Multi-Method Investing® is the simultaneous utilization of four distinct investment management methods in an attempt to improve the probability of achieving investors’ financial goals. As we explain, both proprietary and third-party research has proven that there is no one universal method for every scenario. Rather, each singular approach is well-adapted to particular market environments.
Thus, applying the most effective components of these various methods—and diversifying at the level of investment method—maximizes overall portfolio efficiency.
The four pillars of the Multi-Method Investing® include:
At the heart of 4Thought Financial Group’s strategies resides the establishment of two new financial categories to describe market environments: Wolf and Eagle. Both are subcomponents of the traditional Bull market, and each have respective links to the aforementioned four pillars.
Liability-Driven Investing may have the potential to outperform the other three methods during a Bear market.
Strategic Asset Allocation may have the potential to outperform the other three methods during a Bull market.
Opportunistic Investing may have the potential to outperform the other three methods during a Wolf market.
Selective/Concentrated Investing may have the potential to outperform the other three methods during an Eagle market.
“This means that Wolf and Eagle markets account for a very large proportion of market history,” he explains, “regardless of whether the ‘mutually exclusive or [so-called] ‘overlapping’ definitions are used (even more so with the “mutually exclusive” approach). It follows that if investment assets, strategies, or methods can be found that can perform well in these two newly identified market environments, then perhaps they should be utilized as substantial components within an investor portfolio (possibly in very large proportions, depending on the capital allocation approach).”
Download The Entire Analysis & Learn Much More About 4Thought Financial Group’s Multi-Method Investing® Strategies