Camarda’s Overall Investment Philosophy

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Executive Summary

  • Seek long-term superior performance with lower risk
  • Based on academic research and “best practice” principles
  • Three Key Guidelines
  1. Diversification spreads exposure over many investments, with the goal of reducing risk of loss and increasing chances getting outstanding performers
  2. Buying right – seeking high quality at discount prices builds in a downside cushion and gives an upside bias for patient investors.
  3. Ignoring media hype & short-term trends– avoids performance chasing and lets us focus on long-term probabilities.
  • Instead of playing investment games of chance, Camarda portfolios target long-term financial success based on best practices and probabilities.
  • Designed to help clients build the wealth they need and want for retirement and other goals.
  • Concentrating on overall portfolio performance instead of individual investment results is a key to success – at any point in time, some portfolio pieces will inevitably outperform others

The Camarda managed portfolios seek long term superior performance with lower risk. We study academic research and principles believed to have produced better investment results. In the quest for better and safer returns over time, we feel there are three critical guidelines to follow:

  1. Diversification – spreading investments over multiple opportunities – this reduces the risk of any one poor performer contributing to unacceptable losses, and increases the chances of participating in outstanding performers to grow wealth.
  2. Buying right – taking a Warren Buffett-like value approach, we believe that investing in securities that appear to be undervalued will produce better returns with less risk in the end. Value investing has the strongest academic evidence of producing superior long-term results.
  3. Ignoring short term trends and media noise – recent trends can be a contrary indicator. What did well recently – and likely got overvalued in the process – tends to do poorer going forward. Also, it is important to remember that financial media are businesses paid to get your attention, not to educate you. They tend toward sensationalist, shallow, “this just in!” “better watch now!” messages that can interfere with more comprehensive and wiser views of the world, leading to poor decisions.

The Camarda strategies are designed to facilitate long term financial success. The objective of the portfolios is to provide the wealth clients need and want to fund their retirement and other financial goals effectively.

To accomplish this, we take the long view instead of trying to “beat the market” over the short term, though this sometimes happens.

Rather, our intention is to provide the building blocks for a prudent and effective-long term investment plan, customized for each client, and designed to meet their investment goals and financial planning needs over clients’ whole life planning cycles.

We think this approach makes a lot more sense than chasing performance and making frequent knee-jerk changes, at the risk of big losses and unmet goals.

In the end, we believe sticking with well-designed and disciplined plans will produce much better performance results.

Finally, it is important to stress the primary reason for diversification: Not every investment will do well, at least not at the same time!

Expecting to get all winners is “too good to be true” unrealistic. In a diversified portfolio, by design, and at any given time (since the winners and losers tend to change over time), the better performers carry the poorer performers in contributing to overall portfolio returns.

Investors who focus on overall portfolio results, instead of individual stock or fund results, should not only have more piece of mind, but will likely achieve better results since they can understand the big picture better and should be less prone to make poor decisions – like selling “losers” at the worst possible time – which can harm their wealth.

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