The cornerstone of the Graef Investments Large Cap Portfolio is a style rotation model, and the Portfolio Strategist performs risk mitigation on top of the basic model.
Tactical Asset Allocation
We delve into market breadth, seasonality patterns, and volatility dynamics to gain a nuanced understanding of market behavior. By considering these critical factors, we aim to capitalize on emerging opportunities and navigate market fluctuations.
Top-Down Approach
Our investment methodology adopts a top-down perspective, where we meticulously analyze the market environment from a macro perspective down to individual securities. This holistic view enables us to identify overarching trends and opportunities while mitigating potential risks.
The Directional Portfolio is our most aggressive Portfolio. It contains all the same styles as the Active Portfolio, plus Volatility and Inverse Funds. Volatility measures how dramatically investors expect the market to move in the near future. Volatility typically moves higher when the market drops. Similarly, Inverse Funds are funds designed to move in the opposite direction of the market, moving up when the market moves down. In the Directional Portfolio, the Portfolio Strategist may purchase a combination of cash, Volatility, and/or Inverse Funds when anticipating a potentially significant market drop.
Like the Active Portfolio, the Directional Portfolio seeks to buy strength using our signature style rotation strategy when the Portfolio Strategist is bullish. However, the Directional Portfolio is growth-oriented (using Volatility and Inverse Funds) when bearish. In this Portfolio the Portfolio Strategist tries to make money in bear markets, not just preserve capital.
After a combined 30 years of preparation, we feel excited to make Graef Investments' Portfolios available to Arizona residents. Before Graef Investments launched as a Registered Investment Advisor, we first carried out a pilot program of the Directional Portfolio, which outperformed the S&P 500® by 19.56% (disclosures) from its initial trade through the end of the five and a half month pilot period.
The US Treasury Portfolio exclusively invests in Treasuries and cash (when the Portfolio Strategist opts to turn the portfolio "off" to mitigate risk). Using our signature style rotation strategy, the Portfolio Strategist picks the average time until maturity for the bonds or bond ETFs, a.k.a. duration.
Like the Active Portfolio, the Socially Conscious Portfolio invests in a broad variety of styles - but in the case of the Socially Conscious Portfolio, we selected the entire universe of potential investments with ethics in mind. Styles in the Socially Conscious Portfolio include Environmental, Social, and Governance (ESG) Market Caps, ESG International, Equality, Diversity, Solar, Wind, Clean Energy, Water, Biotechnology, and cash.
As with all Graef Investments Portfolios, the Socially Conscious Portfolio utilizes our signature style rotation strategy with the Portfolio Strategist performing risk mitigation on top of the basic strategy. When bullish, the Portfolio Strategist looks to buy strength, and when bearish, the Portfolio Strategist goes to cash.