The primary focus of the dynamic strategies and the concepts behind it is paraphrased below from statements made many years ago by legendary investment manager Paul Tudor Jones. "Where you want to be is always in control, never wishing, always trading, and always first and foremost protecting your assets. That's why most people lose money as individual investors or traders because they're not focusing on losing money. They need to focus on the money that they have at risk and how much capital is at risk in any single investment they have. If everyone spent 90 percent of their time on that, not 90 percent of the time on pie-in-the-sky ideas on how much money they're going to make. Then they will be incredibly successful investors."
For dynamic portfolio management, each issue selected for inclusion in the portfolio goes through fundamental and / or technical analysis. However, once an issue is selected for inclusion in the portfolio, TRG then applies a "what if" analysis based on the strategy selected by the client.
Risk Manager- Level 1
This strategy focuses on applying a long-term approach when selecting issues, yet applies a downside level of protection in order to protect capital. If the downside protection holds until a portfolio anniversary date is achieved, TRG will review and consider adjusting the level of protection for the following year and then repeat the process of reviewing the position. In addition, near the end of the year, TRG will do an analysis to determine if tax loss harvesting should be applied to the portfolio even if a downside protection isn’t reached in order to ease the impact of taxes on the investor.
Risk Manager - Level 2
This strategy also focuses on applying a long-term approach when selecting issues and downside protection. Yet, unlike Risk Manager - Level 1, this strategy does not necessarily wait for an anniversary date before making adjustments to the downside protection of a position. Instead, we actively manage the protection on an issue-by-issue basis in an effort to protect capital but also protect gains on winning selections. Near the end of the year, TRG will do an analysis to determine if tax loss harvesting should be applied to the portfolio even if a downside protection isn’t reached as a way to mitigate the overall impact of taxes on the portfolio.