Dightman Captial Group
We manage adaptive investment strategies for individual investors, as part of a comprehensive planning environment, designed to protect capital in sustained market contractions and grow capital during market expansions.

Market & Economic Summary

  

Dightman Capital believes one of the key to success in today's environment is to remove entrenched investment biases and implement an adaptive investment process and execution ability. 

The following is our opinion of near-term market and economic conditions.

SPRING 2012

GLOBAL INVESTMENTS
After a very strong rally in Q1, which was a continuation from Q4 2011, stocks have come under selling pressure.  A normal market correction should be expected but investors may want to be on guard for a more sustained market decline given the fragile nature of the current environment. 

WORLD ECONOMY
The Data coming out on the global economy still poses serious challenges.   The debt crisis in Europe could eventually pose liquidity challenges.  Unemployment in the U.S. remains elevated but appears to be improving somewhat.

INFLATION DATA
We believe broad inflation will remain stable for goods and services measured by the Consumer Price Index.  There are risks of elevated prices in select categories like education, healthcare and energy.  Despite current U.S. monetary policy, inflation is likely to be held in check until National Income and Capacity Utilization have increased.  As developed country economies continue to reduce debt levels, deflation in stocks, real estate and commodities may continue.

U.S. RESIDENTIAL HOUSING
It appears housing may be stabilizing in some markets but price recovery may be slow. 

PLANNING
New conversion rules for ROTH IRAs allow high income households an opportunity to fund this unique tax treatment retirement account.

Growth Strategies

We believe a well designed growth strategy needs to have a preservation of capital component.  We address the preservation component with specific investments held in portfolios as well as how the account is allocated toward growth investments.

In terms of the preservation component, it is our job to monitor economic data, corporate earnings, debt markets, stock fundamentals, market sentiment and other metrics to guide our overall view of the investment landscape.  We then compare our economic information with asset performance data.

Generally markets are in an upward trend and we are able to maintain our investment allocations with few changes.  However, our strategy is designed to deliver value in a variety of market conditions and holding do change with market conditions.  The most common term used to describe how we manage portfolios is Core/Satellite. 

  • Our Core investments provide our clients with exposure to a wide variety of global asset classes that tend to exhibit lower volatility than stocks and higher returns than bonds.
  • Our Satellite investments can include high growth opportunities like small international companies, alternative energy companies, industry sectors or other assets.  During difficult market conditions we underweight our satellite investments and increase our cash position.

We believe in asset allocation and diversification, but not in the way modern portfolio theory (developed in the 1950's) prescribes.  We are not frequent traders but there are market conditions where investment changes increase.  We do attempt to reduce some risk factors by focusing on exchange traded funds (or a similar investment structure) versus individual stocks for most of our market exposure.

In summary, we work hard to find money making opportunities for our clients, but we are not afraid to wait out difficult market conditions with a significant cash position if we feel that is the prudent course of action.