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 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.

WINTER 2012

GLOBAL INVESTMENTS
Stocks recently moved higher breaking through the 2011 trading range.  The overall technical structure of the market has turned somewhat bullish but the current rally lacks volume.  U.S. stocks currently lead global markets. 

WORLD ECONOMY
The Data coming out on the global economy still poses serious challenges.   The debt crisis in Europe could eventually pose liquidity challenges for banks.  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 prices are not expected to start recovering any time soon. 

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

The Benefits of Effective Risk Management

At Dightman Capital Group, managing investment risk is one of the most important services we can provide. When you have effective risk management incorporated into a portfolio, the ability to generate a higher rate of return may improve. Bottom line, with each percent you increase your long-term rate of return your total asset or income level rises by a significant amount of money.

For example, a $100,000 portfolio invested over 20 years that earned a 7% average rate of return is worth:

$386,968

A portfolio that averaged a 9% rate of return is worth:

$560,441

The Difference:

$173,473

It is important to pay attention to the performance of your investments.

A reduction in risk (volatility) can also have a positive effect on the compounding features of a return stream. For example, what common characteristic does the following return series share?

A. +40, -20
B. -10, +30
C. +10, +10

They all have an average rate of return of 10%. But what is the value of a $100,000 portfolio at the end of just two years for each of the return series? You might be surprised to learn that it is not the same.

A. $112,000
B. $117,000
C. $121,000

Portfolio C earned an extra $9,000. Quite simply, the power of compounding can be reduced by an increase in return volatility.

Understanding the benefit with each incremental increase in risk and return, is helpful in determining the amount of money you will have to accomplish your lifetime goals.  If you would like to reveiw your risk management stratgy, please call us at 877-874-1133 or send an email to

Other important topics related to investment strategy include:

Advances in Investment Theory

About Index Investing