Defining Investment Management
Here at Fidelibus Lucrum we exercise Proactive Management, and in doing so put to bed the notion that the retail investor has no other options when investing other than Passive or Active Management.
Passive vs Active vs Proactive Management. Understanding investment management dynamics for the experienced investor isn't easy so imagine the confusion the retail investor must be experiencing. Presently we are made to believe that our sole options to investing is between passive or active portfolio management?. Today's unprecedented financial situation warrants the retail investor invests their time and effort to understand where their interests lie, indeed we argue that neither passive or active management is appropriate for today's economic environment.
Passive Management - Involves the creation of a portfolio allocation that is the same as a specific index. Managers select stocks and other securities listed on an index and apply the same weighting. The purpose of passive portfolio management is to generate a return that is the same as the chosen index instead of outperforming it. Because this investment strategy is not proactive, the management fees assessed on passive portfolios or funds are often far lower than active portfolio management strategies.
Active Management - Investors who implement an active management approach use fund managers or brokers to buy and sell stocks in an attempt to outperform a specific index, such as the S&P 500 or the Russell 1000. Portfolio managers engaged in active investing pay close attention to market trends, shifts in the economy, changes to the political landscape and factors that may affect specific companies. This data is used to time the purchase or sale of investments in an effort to take advantage of irregularities. Active managers boast the potential for greater returns than those achieved by simply mimicking the stocks or other securities listed on a particular index.
Proactive Management - Unlike Passive or Active, Proactive avoids investing in any Indexes, Index funds,
Mutual funds because by their very nature it’s a sure way of guaranteeing that you won't outperform. Our model reap benefits from the false myths "Efficient-market hypothesis", "Zero-sum game" consistently outperforming the best performing Mutual funds in the industry using readily available technologies to achieve a higher than 71% profitable trade ratio, (See Fidelibus Lucrum 2016 Results). The portfolios core asset is cash and only taking on risk periodically when appropriate, short selling securities that are overvalued and purchasing securities that are undervalued in the global markets using Stocks, Stock Options, Futures, Future Options, ETF's, ETF Options, CFDs, Warrants, FX etc. This concept is counterintuitive to all investor’s myths, aggressively managed portfolio within a pooled fund, benefiting from economy of scale and the liberty of choosing product, exposure, markets and timing.
The Manager, Fidelibus Lucrum, Pooled Investment Club.
02 October 2016. 14.18 Eastern.
