Investment Methodology
Under PKMC, I adhere to a number of investment methodologies that I have developed and tested over time. However, I have been involved in the markets long enough to understand the need for a certain degree of dynamic malleability to methods as the nature of the financial markets are often capricious. To this end, I am continually examining my methods to better optimize them under current conditions.
General guide lines to Investment Methodology
- Simplicity often trumps complexity
- Quantitative analysis is a useful tool, particularly helpful in removing biases
- The element of time must be considered properly in investment decisions
- One must assume full responsibility for one’s own investment decisions
General structure of Investment Methodology
At PKMC, I run two separate investment funds. The Long-Term Investment Fund is allocated as 60% equity and 40% fixed income. It is benchmarked against the S&P 500 and the PIMCO Long Term Government Fund - PGOVX. The Short-Term Investment Fund focuses on dynamic investment opportunities and trading strategies primarily in the US equity market and the US Treasury market. The short-term investment fund is benchmarked against the S&P 500.
I have currently categorized a number of investment methods and proprietary trading models that are applied to both funds. The models include but are not limited to quantitative analysis ranging from regression analysis, linear optimization, cyclical analysis and simple range analysis. The vast majority of investing and trading are executed off of the models in order to adhere to a disciplined and balanced trading and investment approach. I have found that formalizing my methods in this manner creates a more optimal landscape for decision making and risk analysis.