Caleb Lawrence Hello and welcome. I offer traditional commission based investment management and also fee based financial planning and wealth management services. Additionally I also offer Life Insurance and Long-Term Care insurance in the State of California.

Unlike most of my contemporaries I use an active management process: re-allocating investments in response to changing economic and business cycle conditions as determined through ongoing and continuous research.

While traditional long-term buy and hold investing works very well in a cyclical bull market, the last one ended in early 2000. The current bear market cycle will run until 2010 or 2015 if history is any guide (Crestmont Research, Secular Bull and Bear Market Profile 1901-20xx). Of course past performance is not indicative of future results. Bear markets require an active, as opposed to passive, investment management strategy, one that is designed to capitalize on the ever-shifting investment opportunities available. A famous Ibbotson study on Asset Allocation showed that 91.5% of a portfolio’s investment return was attributable to the allocation model used, the other 8.5% was put down to luck, timing and investment selection.

In order for the Ibbotson results to be true an investor needs 30-40 years - enough time to go through a complete bull and bear market cycle. Most people don't have 30-40 years due to the fact that they don't become serious about investing until their late 40's or early 50's. Potentially serious problems arise if their timing is unlucky and it coincides with the beginning of a bear market cycle. The older a person becomes the greater the level of income investments generally held. Age equals the correct percentage of portfolio investments held in fixed income investments, i.e. 60-Years old means 60% fixed income investments as a general rule. Thus denying the investor the opportunity to recoup the early bear market losses due to a greater allocation of fixed income investments. Additionally, static asset allocation models, no matter how well constructed, fail miserably to account for the fact that different asset classes perform best at different points in the business and/or economic cycle, an idea that is particularly applicable to bear markets.

There's always a bull market somewhere.