At Gunderson Capital Management, we provide active portfolio management for our clients. Our “active” approach to investing allows us to capitalize on opportunities when provided by the market and protect against downside risks when volatility spikes.
Gunderson Capital Management maintains an active approach to investing, while a majority of the financial services industry continues moving towards a more “passive” style of investment management. Passive investing is all about asset allocation, index investing, and staying the course no matter what is happening in the world. In our opinion, passive investing is a simplistic approach to a complex market.
Passive management enables big firms to “standardize” their investing process, allowing even their most inexperienced Financial Advisors to create a “portfolio allocation” for you. Without a focus on “active” investment management, these advisors become nothing more than “asset gatherers”, attempting to open as many accounts as possible. The advisor moves from prospect to prospect, while not having to worry about managing client assets. A computer takes care of investment decisions, so the advisor doesn’t have to.
Clients at passive management firms tend to find themselves in a “one size fits all” allocation, with a computer at the wheel. Software automatically rebalances the asset allocation on a regular basis. Rebalancing is mostly about selling winners and re-purchasing the losers, in an effort to get you back to your original allocation. This robotic style of money management allows the advisor to continue selling, without having to worry about what is going on in the investment world.
In a Financial Industry that is becoming more and more passive, Gunderson Capital Management maintains an active approach to managing client assets. Over the last two decades, we have witnessed two major bear markets that many investors struggled to recover from.
In the 2001-2003 Bear market we learned valuation matters, a lot. Technology stocks were so overvalued at the time, it took the Nasdaq 15 years to recover its 79% loss.
In 2007-2009 we learned to beware of what Wall Street is selling. Their packaged goods sold by passive advisors almost destroyed the financial sector and the economy. Were it not for taxpayer bailouts, many of these mega advisory firms wouldn’t exist today.
Financial markets are anything but passive. Recessions and Bear markets are inevitable. An active approach to investing helps us limit downside risks for our clients. At Gunderson, we have learned you can’t have the offense on the field all the time. Great teams also have a good defense. Defensive players can come in the form of “cash” and/or investments that can make money when markets move lower.
Inverse ETFs can be employed as weak links in the market begin to emerge. In 2001, it was the high-flying tech sector that came unraveled. In 2008, it was the financial sector that imploded. Today, there are “inverse” funds for virtually every asset class, index, or sector. Not only can they be used as hedges, they can also be very profitable on the way down.
At Gunderson Capital Management, we focus our active approach to investing on “stock selection”. Our stock selection process centers around Bill Gunderson’s Best Stocks Now! investment thesis. For example, when you look at an index like the Russell 2000 there are really only about 40-50 Best Stocks Now! candidates out of the 2000 securities listed in the index. These 40-50 stocks are growing at a much faster rate than their peers, while still making sense from a valuation point of view. Herein lies the formula behind Best Stocks Now. To be considered for selection into one of our portfolios, a stock must have momentum and value. This approach helps us narrow down a very large investment universe.
Gunderson Capital Management has developed 8 different portfolios using the Best Stocks Now! approach, ranging from very aggressive (Emerging Growth Portfolio) to very conservative (Best Bonds Now Portfolio). As a Registered Investment Advisor (RIA), we tailor our investment strategies to meet your unique risk tolerance, financial situation, and goals.