We concluded that there is nothing we know today that can help predict returns in the short-term. Simply put, market timing does not work,” said Brent Brodeski, CEO, Savant Capital Management.
Rockford, IL (PRWEB) December 04, 2012
Market turmoil and a suffering economy have forced Americans to look at their finances. Many have lost much of their life savings in the market downtown. People are looking for a quick turn around and are taking the advice of brokers claiming they have the perfect strategy to help investors “win big” in the short-term. The entire industry is built around the idea of beating the market.
Savant Capital Management became part of a “Tactical Think Tank” (TTT) group in 2009 consisting of 10 top independent Registered Investment Advisory (RIA) firms to study whether or not there was a way to “time the market.” The group studied both fundamental and technical factors to see what factors, if any, could help forecast future returns or help avoid market downturns like the one in 2008.
Fundamental factors include price/earnings ratios, dividend yields, inflation, bond spreads, price/book and market capitalization. Technical factors include moving averages, bull/bear indicators, sentiment indications, Bollinger bands and put-call ratio.
The results were disappointing to some members of the TTT, but affirmed Savant’s investment philosophy. A few of the technical factors gave correct buy/sell signals in select time periods, but none were consistent enough to implement. Any minor benefits were offset by costs, higher tax and additional risk.
“We concluded that there is nothing we know today that can help predict returns in the short-term. Simply put, market timing does not work,” said Brent Brodeski, CEO, Savant Capital Management. “No technical factors could have predicted 2008. However, fundamental factors did show evidence that they can be used to shape expectations regarding long-term returns.”
Savant drafted a white paper outlining the firm’s experience in the TTT and highlighting the results. The paper titled, “Tactical Think Tank: A Fundamental Answer for Tactical Asset Allocation” can be viewed on the Journal of Financial Planning website at: http://www.fpanet.org/journal/TacticalThinkTank/.
About Savant Capital Management
Savant Capital Management offers investment management, financial planning, and family office services to individuals, trust funds, retirement plans and non-profit organizations. It also provides portfolio design and management, tax planning, advanced estate and financial planning and sophisticated business and senior executive consulting services.
Savant has regularly received local and national recognition. For the past six years Savant has been named by Barron’s magazine as one of the 100 Best Independent Financial Advisors in the United States. In addition, Savant has earned a place on the Bloomberg/Wealth Manager/AdvisorOne “Top Dog” list for the past 10 years. Our hard work and commitment to provide the best service and value to clients has also earned us recognition by publications including InvestmentNews (one of the 50 Largest Wealth Management Firms in the Nation), Financial Advisor magazine (A Top-Growing Independent RIA), BusinessWeek (Most Experienced RIA List), and Forbes (Top 50 Registered Investment Advisor).
Savant Capital Management is a Registered Investment Advisor. This announcement is only intended for interested investors residing in states in which the Advisor is qualified to provide investment advisory services. Please contact the Advisor to find out if they are qualified to provide investment advisory services in the state where you reside. Savant’s marketing material should not be construed by any existing or prospective client as a guarantee that they will experience a certain level of results if they engage the Advisor’s services and includes lists or rankings published by magazines and other sources which are generally based exclusively on information prepared and submitted by the recognized Advisor. The Advisor does not attempt to furnish personalized investment advice or services through this publication. Past performance is no guarantee of future results.