BMA understand the global interconnectedness of markets. Long gone are the days where one could ignore ‘happenings’ from overseas. Correlation among global and domestic markets has notably increased as the speed of information, the advent of trading algorithms as well as structural shifts in market behavior changed the investing landscape.

To put it bluntly, to ignore these global factors is to ignore reality and thus risk unnecessarily deep portfolio drawdowns. In other words, the old and rather static ‘60/40 model’ (60% of the portfolio is allocated to stocks, 40% allocated to bonds) is dead.

The reality is that one can either stubbornly apply outdated models to the modern markets, or one can adjust to the new realities and respect the market environment that is in front of us.

Global macro and sector & group rotation is how markets work as money is constantly looking for the most opportune pockets to be allocated to. Our proactive approach to the financial markets and portfolio management focuses on avoiding big market drawdowns by staying ahead of the curve.

The Blue Marlin Advisors strategies focus on both capital appreciation and income generation, all the while respecting the number one goal; capital preservation.

The bottom line is this….

Our goals for client portfolios: Minimizing volatility yet allowing for maximum upside potential, with a core focus on capital preservation.

At Blue Marlin Advisors we apply a so called ‘top-down’ approach the markets and portfolio management. Such an approach understands and respects the fact that the dog wags the tail and not the other way around.

More succinctly as it relates to markets, a top-down philosophy to markets dictates that it is more important to be allocated to the right asset class or sector or group of stocks, rather than trying to pick single stocks regardless of how their respective sector is performing. For example; most stocks in the industrial sector will go up if the sector is rallying. Thus, getting the direction of the sector right is of paramount importance for without this one is fighting a trend.

We constantly monitor trends and trend changes of asset classes (stocks, bonds, commodities, currencies) as well as sectors and groups of stocks in multiple durations. Based on those movements we then hone in on single stocks or ETFs that fit the broader trends of their respective sectors. Such an approach allows us to allocate money in a proactive but not a hyperactive fashion.

The stock market is highly correlated. Correlation is even higher within sectors and groups of stocks. Thus it is imperative to notice which sectors/groups are about to move and less so which individual stocks.

While we embrace a healthy level of risk taking, we feel a comprehensive risk management plan is essential to successfully managing assets through all types of market conditions. BMA has developed a system of sector/group and asset class analysis and overall market indicators to use as a guide to shift assets when necessary to minimize risk while taking advantage of the sectors in the market that offer the greatest risk-adjusted return.

We utilize a systematic review of the overall market and various other factors by the BMA investment team.

We review our overall portfolio weekly/quarterly and make necessary adjustments when necessary. Our primary objective is to be out of sectors that pose the greatest risk to your portfolio. We alter the portfolio’s weighted allocation based on our thorough analysis. We make these changes only when necessary and take into consideration the tax implications of portfolio adjustments.

For new investments added to a client’s portfolio, we factor in the client’s risk tolerance, tax situations, and how new investments will enhance the portfolio performance without increasing the portfolio’s risk beyond the added value.