Ulysses resists the sirens – Oil painting by Herbert James Draper 1909

Trend Concept’s fund managers compare their role to that of Ulysses’ companions: They plug their ears with wax so they can row without being distracted by the siren calls of the markets. Like Ulysses, investors can hear sirens but remain bound to the mast at their own request and thus withstand the temptations of the markets.

TRENDCONCEPT

Philosophy

Protect the value of assets yet utilise uptrends

Many investors have a one-sided focus on generating profits and seem completely oblivious to the fact that if the value of their assets drops dramatically it can take years or even decades to regain the amount originally invested.

Preserving the value assets means exiting risky investments at the right time if a crisis is looming and re-investing in safer asset classes. Investors who lose little or nothing in a downturn are well ahead at the end of the bear market cycle.

To increase the value of assets, investors need to re-enter the international equity, bond and commodities markets when they are rising so the assets can participate in market uptrends.

A 50% drop in the value of an investment means a 100% increase is needed to break even

For example, if the value of an investment drops by 50%, the value of the assets would then have to rise by 100% simply to restore the initial position, and that is not realistic in the short term. Most investors seem to be unaware of this.

By contrast it is realistic to shift assets into safer, less profit-oriented investments in good time, in other words, in response to the first signs of a lasting downtrend. The assets can then be reinvested in growth-oriented areas once a stable upward trend has been re-established.
Evidently, no-one – not even TrendConcept – knows what the future holds. But there is a method that dispenses with forecasting. more...