Asset Management Philosophy

I've learned some very important lessons in my nearly two decades managing money for my clients. It's been very challenging, to say the least, since the year 2000. And it doesn't appear that's changing any time soon. I'll highlight two aspects of my philosophy below.

One of those lessons is, as I've termed it, "when the train is coming, get out of the way!" During the 2000-2002 crash a number of money managers were committed to stay fully invested throughout the sell-off no matter how severe. The problem is people don't like to lose money! I may not be the sharpest knife in the drawer, but I learned this lesson very early in my career! A strong sell discipline is very important during these times. The idea is to get out of the way by liquidating as many asset classes as I believe is necessary in the early stages of a sell-off. The goal is to limit losses as much as possible. This also enables me to take advantage of the recovery, assuming my analysis is correct. 

A second lesson I've learned that plays a very important role in my philosophy is I pay very close attention to major trend changes in the market. Another way to put this is "the trend is your friend". If I am able to identify a major trend and confirm it as so, then I am able to move assets to capitalize and either minimize loses or increase gains. The industry refers to this as tactical allocation.

Ultimately, my goal is to accomplish your primary objectives while defending your assets by reducing volatility and minimizing downside capture (attempting to limit losses or participation in a down market).

James E. Zbach, CRPC® 

Vice President | LPL Registered Representative, LPL Financial Advisor & Retirement Plan Specialist