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MCIM Methodology Life Cycle Portfolios - Ask Your Financial Advisor
MCIM "Life Cycle" portfolios combine risk minimization, asset allocation, equity trading, investment grade value stock (IGVSI) investing, and "base income" generation in a manner that embraces the cyclical nature of markets, interest rates, and economies.
Little weight is given to the short term movement of indices and averages, or to the notion that the calendar year is a valid time frame to use for performance measurement. Life Cycle portfolios are designed to prepare investors for retirement, financially.
Goals of Market Cycle Investment Management "Life Cycle" Portfolios
- Higher lows during market downturns, i.e., less of a drawdown than the S & P 500 Average
- Increasing cash positions prior to market corrections as a result of both profit taking and routine income generation from portfolio securities
- Steady, even rising, income levels during corrections
- Timely movement to new all-time portfolio market value levels, fueled by the discipline to purchase securities during the downturn
- Steady growth in realized base income from the reinvestment of dividend and income cash flow in the "income bucket" of the portfolio
- 100% realized reasonable profit experience at all times, and with no looking back --- no major disappearing profits, ever
Steps taken to lower portfolio investment risk levels include:
- Strict focus on Investment Grade Value Stocks and equally high quality level ADRs (These are almost exclusively "Low Beta" Securities.)
- Conservative diversification rules with regard to individual and sector holdings
- Some income production from every security owned
- Zero tolerance for margin debt
- Disciplined, while reasonable, profit taking targets.
- No Mutual Funds, No IPOs, No NASDAQ = no problems (think how that would have worked for you during the Dot Com Bubble)
- Actively managed/traded income CEFs
Keeping The Program Simple
- Three basic asset allocations: 60-40; 40-60; 10-90 with income positions either 100% in taxable CEFs or 100% in Municipal CEFs.
- 60-40 asset allocations are generally best for younger investors, or those with at least seven years until retirement;
- 40-60 allocations are for those who are more risk averse, of very high net worth, or within six or seven years of retirement;
- 10-90 arrangements are generally for those who are just starting their investment program, or considering retirement within the next five years or so.
Private "Life Cycle" Program Suggestions (not applicable to 401(k) programs)
- Private MCIM "Life Cycle" portfolios should be funded with at least $150,000 to ease diversification efforts and to assure an adequate equity selection universe ( there are only 350 IGVSs and a handfull of ADRs to choose from).
- Withdrawals should be planned for with cash reserves, and replaced as soon as possible. All portfolios should be managed on a "flat fee" basis, and such fees are treated as withdrawals.
- As a benchmark, total fees + commissions for a direct-contact-with-your-manager portfolio may start at around 2.55% per year, and move downward with larger portfolio commitments.
- There should be no penalty for terminating the program (some custodians do charge reasonable ternmination fees), but you should expect to continue with it for at least one market cycle, or 36 months --- whichever is longer.
- You should always have direct contact with the investment manager.
- You must receive (and acknowledge receipt of) disclosure documentation from all parties to any management arrangement.
CLICK HERE TO JOIN MY PRIVATE MAILING LIST
Market Cycle Investment Management
3912 Betsy Kerrison Pkwy
Johns Island, SC 29455
Phone (800) 245-0494 • Fax (843) 243-8509
Contact Steve directly for additional information: 800-245-0494
|Please read this disclaimer:|
Steve Selengut is registered as an investment adviser representative. His assessments and opinions are purely his own. None of the information presented here should be construed as an endorsement of any business entity; the information is only intended to be educational and thought provoking.
The Working Capital Model - Market Cycle Investment Management - FREE Mentoring Program
Professional Investor/Manager Steve Selengut, and an experienced panel of experts, walk you through the Market Cycle Investment Management (MCIM) portfolio management process. We'll hold your hand, answer your questions, and do everything we can short of security selection as you learn how to run your own (or your client's) portfolio.
The Mentoring Program is FREE, and includes:
- The "Road To Success" Investment Training Program (minimum of 3 sessions)
- The "Performance Investors Want & How to Get It" program (if applicable)
- The "Market Cycle Investment Management" program
The mentoring program is no longer private --- at least six people (all "Brainwashing" book owners) must attend each meeting.
Note: Headsets will make the experience much more productive.
CLICK HERE TO JOIN MY PRIVATE MAILING LIST
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|Please read this disclaimer:|
Steve Selengut is registered as an investment advisor representative. His assessments and opinions are purely his own and do not represent the views of any other entity. None of his commentary is or should be considered either investment advice or a solicitation of business. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be or should be construed as an endorsement of any entity or organization. The reader should not assume that any strategies, or investments mentioned are any more than illustrations --- they are never recommendations, and others will most certainly disagree with the thoughts presented in the article.