INVESTMENT PHILOSOPHY

"An investment in knowledge pays the best interest." - Benjamin Franklin

 

We have constructed each clients’ portfolio based on his or her personal preference and attitude towards risk.

Once the exact allocation is chosen, we invest it using a dollar cost averaging method in order to average the purchase cost during the portfolio's infancy.

 

A TYPICAL PORTFOLIO ALLOCATION (Moderate Risk tolerance Level)

1. Indexes & Exchange traded funds (30%-60% of the portfolio, depending on the market situation).

2. Growth Opportunities & Value Opportunities

3. Cash for Crash (we try to always have a minimum of 10% in cash in bull markets and have gone up to 70% in bear markets)

RISK CONTROLS

At Regev Financial we manage a portfolio with a pre-defined risk control strategy.

This means that the moment we purchase a security we also place a stop loss order at a 5-7% decline from the purchase price. This stop is adjusted upwards but not downwards.

There is one truth that is very difficult to dispute – market price.

If an individual stock (not an index or an ETF) is “misbehaving” and despite our deep fundamental and technical analysis it is still going down – we sell first and ask questions later. We prefer to experience a whipsaw (an immediate recovery) over having a security substantially decline.

When it comes to the core indexes and ETF’s we usually purchase 5% of the account value each time the security’s price goes down by 5% unless we think that we are going through a major market correction and not a regular pullback.

DEFENSIVE MEASURES

 

1. Cash for Crash - The ability to buy at lower prices when the market is down

2. Diversification - Ensuring low correlation between the different investments

3. Defensive Industries - Healthcare, Utilities, Consumer Staples

4. Precious Metals

DIVERSIFICATION

Diversification is a risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique contends that a portfolio constructed of different kinds of investments will, on average, yield higher returns and pose a lower risk than any individual investment found within the portfolio.

Diversification is accomplished on multiple levels:

  • Multiple asset classes

  • Variety within the assets class

  • Different Industries - Cyclical, Sensitive and Defensive

  • Geographical - Avoidance of home country bias

INDEX FUNDS

The funds that we use are selected based on their risk adjusted return as well as cost and their performance in correlation to the index that they are tracking.

An index fund is a type of mutual fund with a portfolio constructed to match or track the components of a market index, such as a Standard & Poor's 500 Index (S&P 500). An index mutual fund is said to provide broad market exposure, low operating expenses and low portfolio turnover.

INDIVIDUAL STOCKS

 

When it comes to individual stocks we follow a well defined and rigorous selection process using more than 30 points of review for each stock (i.e. earning, debt, insiders activity, revenue, income, growth and much more). We utilize both value and growth stocks.

VALUE INVESTING

Value investing is an investment strategy where stocks are selected that trade for less than their intrinsic values. Value investors actively seek stocks they believe the market has undervalued. Investors who use this strategy believe the market overreacts to good and bad news, resulting in stock price movements that do not correspond with a company's long-term fundamentals, giving an opportunity to profit when the price is deflated.

GROWTH STOCKS

A growth stock is a share in a company whose earnings are expected to grow at an above-average rate relative to the market. A growth stock usually does not pay a dividend, as the company would prefer to reinvest retained earnings in capital projects. Growth investors choose stocks based on the potential for capital gains, not dividend income so they can be risky.

CUSTODIAN

We do not hold any of the client’s funds in house nor do we generate any clients statements Our clients advisory and brokerage accounts are solely held and administered with Pershing – a wholly owned subsidiary of the BNY – Mellon bank. Pershing is one of the largest custodians in the world and BNY is among the first banks established in the western hemisphere and has been repeatedly selected as one of America’s best and safest banks.

Read More about BNY Mellon here.

 

DIFFERENTIATORS BETWEEN US & THE 'BIG NAME' COMPETITORS

Besides our consistent care and consideration, we strive to provide a white-glove, concierge level customer service experience. We believe there are fundamental differentiators between us and our competition. Namely, our custodian: Pershing, a subsidiary of the Bank of New York, Mellon. It is the largest custodian in the industry.

 

What does that mean for you?

  • It means that we are not part of an investment bank and our broker dealer doesn’t participate in new offerings. In addition, our broker dealer doesn’t have proprietary products that we need to sell, and we can be completely agnostic.

  • Because we are part of an independent broker dealer, our payout ratios are substantially higher than the adviser’s payouts with the brand name broker dealers which allows us to charge lower advisory fees.

  • We have a fully integrated, systematized program to analyze and monitor investments as well as a streamlined service database.

  • We have over 20 years of investment advisory experience which includes two major market meltdowns as well as one great recession. 

 

SUMMARY

1. Hands on approach

2. Low cost index funds

3. Value Investing

4. Growth Opportunities (taking advantage of market opportunities)

5. Active and Passive Protection

Periodic investment plans do not assure a profit or protect against a loss in declining markets. Such plans involve continuous investment in securities regardless of fluctuating price levels. Investors should consider their financial ability to continue purchases through periods of low price levels. Diversification or Value Investing does not ensure a profit or protect against a loss in a declining market. Indexes are unmanaged and an investor cannot directly invest in an index. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results. Please note that individual situations can vary.  Therefore, the information presented here should only be relied upon when coordinated with individual professional advice.