THE EMERALD ALLOCATION STRATEGIES (EAS) INVESTMENT PROCESSIn developing and refining our strategy models, we use a combination of fundamental analysis (both top-down and bottom-up), quantitative analysis and technical analysis. Examples of each in the process include: 1. Top-down: determination of the allocation to each strategy2. Bottom-up: selection of funds that are attractive investments within that strategy 3. Quantitative: factors such as dividend rate, turnover, expense ratio and imbedded unrealized capital gains in a fund are all considered in the evaluation of a fund for the models. 4. Technical: once the other screening methods have been completed, charting analysis has been a very useful tool for us to determine the best entry and exit points for a fund, as well as to analyze general market conditions. We also pay close attention to traditional sentiment indicators. In particular, we have observed that many well-known indicators are counterintuitive. A common example is the variety of investor and market advisor sentiment indicators that show market participants to be most bullish right before declines and most bearish at the bottom. A very wise person once said that the markets wring the most amount of pain out of investors. As we have seen this proven time and again, we try to look ahead to what is likely to happen next, and not get too caught up in what just happened. "Avoiding trouble is more important than finding that next big winner" SELL DISCIPLINEAs with any portfolio management situation, one of the critical elements of success is having a sell discipline. In our opinion not having a good one was the single biggest cause of investor losses in the 2000-2002 stock decline.So, what how do we decide when to exit a position in an account? 1. Our price objective is achieved |