arl advisers presentation
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Dear Fellow Investor:
I have entered the asset management business. My company, ARL Advisers, LLC, is a registered investment advisory in the State of Kentucky, and I am seeking your business.
With all the options out there, why consider what I have to offer?
First, I like to think that what I do is unique, but not special. I will not be selling you hype or the latest and greatest. My methodology is driven by my own research and the data, and all investing decisions are objective. Second, my market edge is the ability to use my computer, and I level the playing field even more by investing in markets not companies. Third, I put a great emphasis on risk management as it is one of the few aspects of the markets that I can control.
Please take 15 minutes to review my presentation. Here I outline my approach to the markets, and the types of portfolios that we customize for our clients. More importantly, you will understand what I have been doing for the past 10 years of my life, and I hope you will come away with the notion that I am committed to providing you with the best service possible.
As you review the material, ask yourself these three questions: 1) what was my financial plan for the past 10 years?; 2) how will I navigate the markets in the next 10 years?; 3) what is my plan to capture new opportunities and reduce risks in the future? I don’t have a crystal ball nor do I need one. However, I do have a plan and a methodology that should capture the major themes. My emphasis is on a disciplined strategy. In essence, I am offering highly stylized, institutional quality portfolios but without the churn of excessive trading and without the high fees.
I look forward to talking to you soon, and thank you for your time.
Guy
“See why we are different.”guy@arladvisers.com
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Key Pointsstrategic asset allocation is superior to passive asset allocation
strategic asset allocation produces consistent returns while protecting against losses
ARL Advisers, LLC is replicating a strategy that is commonly employed by major hedge funds and endowments
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Key Points ARL Advisers, LLC uses proprietary models to allocate
investment funds toward asset classes with the highest potential for appreciation and away from asset classes with greater potential for loss
funds are allocated across a breadth of alternative asset classes – you are not limited to stocks and bonds
all models are quantitatively derived from fundamental and technical inputs
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Key Pointsemphasis on a disciplined strategy
emphasis on money management
emphasis on risk management
emphasis on investing not trading
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INTRODUCTION
goals
suitability
universe of assets
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my goal
is to make you money!
is to invest for long-term returns while managing risk is to outperform the broad stock markets over the full market cycle (peak-to-peak or trough-to-trough) with less risk than experienced by passive approaches
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suitabilityintended for long-term investors following a disciplined saving and investing program
individual investors institutional investorsinvestors seeking growth of income and capital preservationtax deferred or taxable accounts
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universe of assetstraditional
US equity ETF’sBond ETF’sSector ETF’s
non-traditionalForeign developed equity ETF’sForeign emerging market equity ETF’sInternational Bond ETF’sREIT ETF’sCommodity ETF’sDollar/ currency ETF’s
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The Strategy
Asset allocation that is strategic, balanced, and targeted
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the benefits of passive asset allocation are well known*
asset allocation reduces portfolio volatility without sacrificing returns
ability to profit in any economic environment
*Gibson, Roger C., Asset Allocation: 4th Edition, (2008)
Darst, David H., The Art of Asset Allocation: Principles and Investment Strategies For Any Market, Second Edition, (2008)
Ferri, Richard A., All About Asset Allocation, (2005)
Bernstein, William, The Intelligent Asset Allocator: How To Build Your Portfolio To Maximize Returns and Minimize Risk , (2000)
Swensen, David, Unconventional Success, A Fundamental Approach To Personal Investment, (2005)
Dalio, Ray, “Engineering Targeted Returns and Risk”, (2005)
Merriman-Cohen, Jeff, “The Perfect Portfolio”, (2003) click here fornext slide
then came 2008when most major assets became highly correlated
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A Better Way!!!
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Step 1: strategic asset allocation
tactical or strategic asset allocation directs funds toward asset classes with the highest potential for appreciation and away from asset classes with greater potential for loss
proprietary, quantitative models are utilized to generate buy and sell signals
models utilize fundamental and technical inputs
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Step 2: risk management
risk management is achieved through a balanced portfolio that it is constructed from diversified, non-correlated assets
the diversified, non-correlated assets and money management strategy will seek to mitigate risk without decreasing returns
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Step 3: targeted returns
each investor has their own level of acceptable risk and their own expectations for returns
through the selection of different assets and the use of a money management strategy, the return/ risk level is targeted for each investor
level of return correlates with level of risk
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Portfolio Examplesthese are hypothetical portfolios based upon historical data
commissions , trading slippage, and taxes are not considered
for back testing purposes, portfolios may use index data
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Conservative PortfolioGoal: earn return = to long term returns of SP500 with capital preservation
Assets: SP500, Bonds, Utilities, Gold
Allocation: SP500(25%), Bonds (30%), Gold (20%), Utilities (25%)
Money Management: No rebalancing, go to cash if asset on sell signal
When in cash, money earns interest at commercial paper rate click here for
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Conservative Portfoliosince November, 1991, this strategy had a CAGR of 8.09%
$100,000 becomes $453,208
the maximum drawdown (loss) was 8.34%
the strategy averaged 6 round trip trades per year
the strategy was invested 100% only 25% of the time
the strategy had only 1 or no investment position 33% of the time
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Conservative Portfolio : equity curve v. SP500
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Drawdown is the peak-to-trough decline (in percentage terms) of an
investment, and it is measured from the time a retrenchment begins to when a new high is
reached. Drawdown is a measure of risk.
Conservative Portfolio: drawdown
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Conservative Portfolioconsistent returns
capital preservation
low volatility
periods of high cash
minimal churning
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Broad Market PortfolioGoal: earn return > SP500 with significantly reduced volatility
Assets: SP500 sector ETF’s, REITs, Foreign Developed, Emerging Market, Treasury Bonds
Allocation: based upon # of sectors/ assets on buy signal
Money Management: rebalance weekly if new buy signals
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Broad Market Portfoliosince November, 2001, this strategy had a CAGR of 15.27%
$100,000 becomes $430,312
the maximum drawdown (loss) was 10.58%
the strategy averaged <50 round trip trades per year
the strategy had > 75% of its funds invested 56% of the time
the strategy was in 100% cash 26% of the time click here fornext slide
Broad Market Portfolio: equity curve v. SP500
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Broad Market Portfolio: drawdown
Broad Market Portfoliobroad exposure to domestic markets at the sector level
exposure to emerging markets and developed foreign markets
diversified
bond exposure in times of market duress
superior reward to risk
minimal churningclick here fornext slide
Targeted ReturnsWith multiple assets available and with various money management schemes, a portfolio can be designed to suit your needs
Portfolios designed from conservative to aggressive
Portfolios designed to be long and short the markets
Portfolios designed to have high or low cash levels
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On the use of models and back testing to “predict” the future:
past performance does not ensure future results
there is no assurance that ARL Advisers, LLC will achieve its investment objectives
however….
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you cannot understand the present if you don’t know what worked in the past
key to superior long-term returns is to take investment opportunities when the evidence suggests high return/risk tradeoffs on average, and to avoid situations when the evidence suggests low return/risk tradeoffs on average
back testing puts an emphasis on a disciplined strategy and ensures the conviction to execute the strategy
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ARL Advisers, LLC: the service$50,000 minimum investment
fees based on assets under management
all funds held by 3rd party custodian
daily access to account via internet
monthly statements
quarterly reports
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Guy M. Lerner, MD
managing partner of ARL Advisers, LLC
licensed investment adviser, Series 65, 2007
founder TheTechnicalTake blog, 2004 to present
featured columnist with RealMoney.com and TheStreet.com, 2004 to 2006
routinely published in some of the most widely read financial publications
marquee speaker at financial seminars
for 20 years, has practiced as a pediatric anesthesiologist in some of the top universities and hospitals in the country
Bachelor of Arts in Literature, University of Pennsylvania, 1981
Doctor of Medicine, University of Pittsburgh School of Medicine, 1986
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ARL Advisers, LLCasset allocation that is strategic, balanced, and targeted
portfolio diversification through innovative strategies
independent investment research
discipline and conviction
integrity
leads to…..
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Performance
competitive risk adjusted investment returns
ability to profit in any economic environment
reduced portfolio volatility
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Past performance is not an indication of future performance and there can be no assurance that ARL Investment Advisers, LLC will meet its investment objectives. The information contained in this presentation is neither an offer to sell nor a solicitation of an offer to buy an interest in ARL Advisers LLC. Any such offer or solicitation can be made only be means of a confidential private offering memorandum and only in those jurisdictions where permitted by law.
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THIS DOCUMENT IS INTENDED SOLEY FOR USE BY FINANCIAL ADVISORS AND THEIR CLIENTS OR BONA FIDE PROSPECTS WHO ARE ACCREDITED INVESTORS. THIS DOCUMENT MAY NOT BE REPRODUCED OR DISTRIBUTED, IN WHOLE OR IN PART, TO ANY OTHER PERSON NOR MAY IT BE USED IN PUBLIC SEMINARS, NEWSLETTERS OR ADVERTISEMENTS.PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. ALL DATA CONTAINED HEREIN HAS BEEN OBTAINED FROM RELIABLE SOURCES, HOWEVER ARL ADVISERS, LLC CANNOT BE REPONSIBLE FOR ERRORS AND OMISSIONS FROM SUCH SOURCES. THIS DOCUMENT IS NEITHER AN OFFER TO SELL NOR A SOLICITAION OF AN OFFER TO BUY UNITS OF LIMITED PARTNERSHIP INTERESTS IN THE ARL ADVISERS, LLC. AN OFFER OF SUCH INTEREST CAN BE MADE ONLY BY MEANS OF THE CONFIDENTIAL OFFERING MEMORANDUM.YOU AND YOUR FINANCIAL ADVISOR SHOULD CAREFULLY CONSIDER WHETHER YOUR FINANCIAL CONDITION PERMITS YOU TO PARTICIPATE IN ARL ADVISERS, LLC. YOU SHOULD BE AWARE OF THE RISKS IN THE FINANCIAL MARKETS AND OF INVESTING WITH ARL ADVISERS, LLC
THE CONFIDENTIAL OFFERING MEMORANDA OF THE FUNDS CONTAIN A DESCRIPTION OF THE PRINCIPAL RISK FACTORS, EACH EXPENSE TO BE CHARGED TO THE FUNDS AND A STATEMENT OF THE AMOUNT, AS A PERCENTAGE RETURN AND DOLLAR AMOUNT, NECESSARY TO BREAK-EVEN (THAT IS, TO RECOVER THE AMOUNT OF YOUR INITIAL INVESTMENT).
PROSPECTIVE INVESTORS WILL RECEIVE A DISCLOSURE DOCUMENT WHEN THEY ARE SOLICITED TO INVEST WITH ARL ADVISERS, LLC AND THAT CERTAIN RISK FACTORS BE HIGHLIGHTED. THEREFORE, YOU SHOULD ASK YOUR FINANCIAL ADVISOR OR THE GENERAL PARTNER FOR A COPY OF THE CONFIDENTIAL OFFERING MEMORANDUM AND STUDY IT CAREFULLY TO DETERMINE WHETHER SUCH AN INVSTMENT IS APPROPRIATE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. click here for
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email: guy@arladvisers.com
phone:502 552 0018
mailing address:ARL Advisers, LLC528 Barberry LaneLouisville, KY 40206
business hours:Monday – Friday, 8 a.m. to 5:00 p.m. EST
websites:www.arladvisers.comwww.thetechnicaltake.com
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