Managed Discretionary Accounts Trading Methodology

Trading a view ...Fundamental analysis, technical analysis, Research and news.
When we trade for our managed accounts, rather than using one or two methods of analysis, we take into account all available information, form a view, and trade that view. We seek to identify opportunities in the market place using this methodology and trade in line with that view until new information comes to light which causes us to adjust that view.

Using fundamental, macro and micro economics, and technical analysis combined with all available research and news this approach enables us to build a well rounded view before taking a position in the market.

Active, high conviction managed share investment.
The actively managed nature of the accounts means our primary investment position is cash. In our view cash in a trade, and being able to utilise it as an investment choice has been a fundamental key to our consistent outperformance of the market. Your money is held in a high yield CMA until it is allocated to a trade; once that trade is completed the money is deposited back into your CMA where it continues to earn interest until the next trade is placed. At any one time you could expect to be invested between 0% and 100% depending on the market at the time. When we are in cash, we are actively looking seeking value opportunities to invest in, and conversely when we are full invested we are looking to capture profits and return to our base position of cash.

How we generate outperformance
As mentioned above the use of cash as a trade is one of the key points of difference between our Managed Accounts and other more traditional styles of investments such as managed funds which are mandated to hold traditionally low levels of cash. By constantly adjusting how much cash we deploy and how much we hold, (based on our daily assessments of the balance of risks in the market, and whether the market is overbought or oversold) we are able to take positions in the sectors of the market that are moving then move back to cash before finding the next sector that's moving. If we feel that the market is over valued (where the real risk of the market falling is high) we will look to increase cash and lock in profits, similarly as the market is falling we will look for value to emerge before deploying cash into shares thus reducing our cash holdings as the real risk of the market falling has dropped. As you can see from our Managed Accounts performance chart the ability adjust the amount of cash we hold has generated us significant outperformance over time.

Where do we invest?
While our mandate is fairly broad and covers the majority of stocks in the ASX200 index, approximately 90% of all investments are made within the ASX top 20 stocks. There are a number of reasons for this, principally all stocks are well researched by all of the big brokerage firms so there is never any shortage of reading material for us. Stocks in the ASX top 20 are also highly liquid allowing us to move swiftly in and out of stocks with ease. The timing of our entries (and exits) is another key component of us generating outperformance. We are also able to invest a limited amount of the portfolio in options to enable us to hedge against significant market decline or to take advantage of a fall in the market.

Talk to us today about opening a Managed Discretionary Account with William Shaw.