investment research

The State of Our Union

© Can Stock Photo / Niyazz

Our union? Yes, you and we are partners in a unique enterprise. As a client, you share our confidence about the long term. Many of you are willing to live with volatility in the short term to get where you want to go. And many of you don’t join stampedes or sell out in panic. This investment behavior puts you in a select group. It is a vital ingredient in the beginning of your success—and ours.

The 21st anniversary of the decision to embark on our ultimate business venture is a natural time to take stock. Where are we now? Where are we going? We’ll assess this in terms of our three key activities.

Communications.

We love to talk—you know this. About two years ago, we began to figure out how to talk to all of you, every day if you would like. The new media has two aspects. Real time commentary and news shows up in the social media venues like Facebook and Twitter. A permanent library of all of our philosophy and strategies and methods can be found 24/7 at 228Main.com.

Paradoxically, the success of our new media has given us more time to talk one on one, by telephone or email or in person. So now we spend more time doing what we love, connecting with you directly. We expect to continue to build both our archives and our skill at real time interaction.

Investment Research.

To a surprising extent, our research capabilities are tied to new media activity. We interact with great minds in economics and market strategy, trading ideas and insights and finding topics we wish to investigate more deeply.

The one-to-one communications with you also contain a research element. We gain perspective on global markets by talking to executives who have traveled the world on business. We have a better understanding of specific industries and companies because we talk to people who are in those businesses. Every one of you is a consumer, and we talk to you about companies and products you deal with every day.

Our conventional sources have never been better, either. LPL Financial continues to build out our back office research staff by adding and developing talent. Bottom line: we are connected to ever-richer sources of ideas and trends as well as the specific data we need to do our work.

Portfolio Management.

Over the past eighteen months we have worked on improving our capability to act more quickly on fleeting opportunities. You saw the results. Our portfolio review process is more robust than it ever has been.

We also have tweaked our strategy. Now, client portfolios see more activity but in smaller pieces. Instead of looking for opportunities where we can invest 5% of a portfolio balance, we will take action if 1 or 2 or 3% position sizes are appropriate. With more holdings comes greater diversification. Theoretically, this may give us a smoother ride to our goals.

The markets are like a thousand piece mosaic whose tiles are constantly changing. So we cannot tell you what changes are coming in the future—only that we will always be trying to figure out how to grow your buckets more effectively.

So the state of our union is grand. We have focused on our systems and processes so we can take care of business no matter what happens in our lives or the economy and markets. We offer no guarantees about the future, except for our intent to get better as we go along. Thank you all for your part in our unique partnership. Clients, if you’d like to talk at greater length about these things or anything else, please email or call.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Meet Our Research Sources

© Can Stock Photo Inc. / meggichka

You already know Mark Leibman and our LPL Registered Administrative Associate Greg Leibman. But you might not know our allied staff economist, our fixed income research director, our market strategist, or the fellow who oversees the whole allied research effort. John Lynch, Matthew Peterson, Ryan Detrick, and Burt White have decades of experience, advanced degrees, specialized training and the appropriate professional designations.

Most importantly, they each have the ability to communicate economic and market developments with the context and background needed to get at the real meaning and significance.

These folks do not work at 228 Main. They are the key people among dozens in LPL Financial’s Research Department. In our quest to find the right investments, and to understand the economic and market environment in which we live, they play a major role. They put out reports, they help conduct the daily Research Morning conference call, they blog, they tweet—they communicate.

One of the wonderful things about life in the 21st century is the vast amount of information available. We’ve spent a lot of time appraising the quality of commentary from across the financial industry. We are able to follow key specialists at Schwab and Morgan Stanley and Wells Fargo and other firms, as well as our most respected peers and money managers.

The Washington Post, the Wall Street Journal and the New York Times provide a great overview of the major stories of the day, and more detailed trade publications are a vital source of news about the industries in which we’ve invested. People with specialized knowledge are available through blogs and social media, as well. We read the Detroit newspapers for auto industry news, Australian papers for news on global raw materials producers, and we find news sources for other situations as needed. Subscription-based investment research and data round out our fundamental sources.

We have what we need to do our own thinking, draw our own conclusions, and take action in pursuit of your interests. If you have specific questions, please call or write to ask them.