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.

About Index Investing

Index investing has been around for decades and today it is herald as one of the most efficient ways to invest your money. Well known investors like Warren Buffet, Charles Schwab, John Bogle (founder of Vanguard), and Peter Lynch (famous Fidelity Magellan Fund manager) and many others have publicly endorsed index investing as a very efficient method for investors to expose themselves to stock investments.

Some of the more notable advantages to index investing include:

  • Lower Investment Management Expense
  • Near Index Return Potential
  • Pure Asset Classification Potential 
  • Lower Potential Shared Tax Exposure
  • Investment Transparency

THE ROLE OF INDEX INVESTING

The world of index investing has expanded rapidly.  Still, many advisors/consultants are not deploying them fully.  Initially index investments were limited to traditional indexes like the S&P 500 and NASDAQ 100.

Today, many exchange traded funds (international, small company, industry sector, investment style, real estate investment trusts, commodity, and other asset-classes) have been introduced, offering tremendous utility for those investors seeking exposure to a broad representation of the global investment universe.

OUR APPROACH

For the investment manager, the advantages of using indexes are many. Today the ability to pin point a group of stocks based on dividend yield, market capitalization, industry sector, fundamentals, geographic location, or other characteristics provides easy access to specific investment opportunities while the diverisifcation of owning a basket of stocks enhances risk management.

At Dightman Capital, after determine the level of risk we want to expose our strategies to, we then turn our attention to which indexes should be included and how much weight each one should represent in the strategy.  Other advisors are often focused on which mutual fund or seperate account manager is going to beat their investment benchmark this year (most don't, and those that do rarely repeat).(1)

We believe in assessing the near-term investment environment, using index investments for asset-class exposure, and constantly reveiwing the performance of our strategies should render a successful approach to managing investments in today's markets. 

Other important topics related to investment strategy include:

Benefit of Risk Management

Advances in Investment Theory 

(1) Journal Of Financial Planning, “The Difficulty of Selecting Superior Mutual Fund Performance” February 2006