26 Apr The Foundations of SignalPoint – Logic
The Foundations of SignalPoint –
Our Values : Logic
Often times in life, behaviors naturally contrast. We deal with a mechanic who is honest and hardworking who quickly fixes the issue at hand, but there is always another shop down the street notorious for finding things wrong with the vehicle that weren’t a problem before the vehicle was parked in their garage. Everyone knows of a doctor who displays excellent “bedside manner” in their office or at the hospital, carefully explaining the intricacies of a diagnosis or willingly answering questions about the circumstance at hand. Yet, for every doctor with excellent interpersonal skills, there may be one that uses advanced medical terminology that the average person lacks the experience to understand. With the mechanic or the doctor, the situation can be either satisfying or frustrating. It should come as no surprise that the same can be said of those of us within the financial services industry.
This contrast of behavior doesn’t make one of the individuals good and the other bad, yet society values the mechanic, doctor or the financial advisor who displays the down to earth approach of interacting with others and taking care of the business at hand. As in other professions, there is a set of opposing behaviors in the financial services industry that hugely impact clients. This is often seen in how firms and advisors interact with fluctuations in the market.
Some firms radically react to market conditions, allowing their investment strategies to be swayed by ever changing opinions about the economy. This type of firm may have many clients but does not have each individual client’s best interest in mind when attempting to interpret swings in the market. In contrast to this, some organizations will carefully analyze their client’s needs, wishes, and portfolios with disciplined effort. (see one of our previous articles on discipline here: https://signalpointinvest.com/the-foundations-of-signalpoint-discipline/) This analysis is not a reaction to the market, but rather a logical process in which the firm and its advisors initiate a plan to do what is best for each individual client’s needs.
At SignalPoint, we believe that logic should drive our interactions with the market, our decisions about portfolio management, and our communication with clients. We make an effort to not overreact to any situations we may encounter throughout the day, week, or year. By using a logical approach in these many different circumstances, we are able to analyze all of the facts and sift through all of the information. Instead of automatically reverting to emotionally charged decisions, we delay the decision making process just long enough to carefully examine the variety of complex conditions at hand.
Investing without excessive emotion and using logic instead is much easier said than done. We attempt to help clients sort through and understand their risk tolerance and the risks of investments inside their portfolios. This can be an important starting point for making investing decisions. When a previously unidentified risk is present, it becomes our duty to communicate clearly and effectively with clients, giving them perspective on current standings. We actively research to achieve understanding of the markets and what may be driving bullish or bearish trends in the market.
Rarely does emotional investing prove to be profitable, especially over long periods of time. Data shows that following a well-defined investing strategy and staying the course through market volatility often results in the best performance returns.
At SignalPoint, we focus primarily on these final aspects. It is our duty to provide clients with an investment strategy that suits their current and long-term needs. Additionally, we wish to serve as a guide whenever a client has questions about their financial situation. We believe that logic can serve as a key to open either door.
– The Team at SignalPoint Asset Management