Overview:  Know WHERE to Invest and Know WHEN to Invest

Just like playing a piano the music sounds best when played with both hands.  Simply diversifying and holding investments for the long term is not the best answer in our opinion.  Proponents of this approach believe that owning a percentage of a variety of investments provides the best chance of a competitive rate of return, as well as, a form of principal protection – the idea being when one investment zigs there will be another that will zag.  We believe two things:  Identifying and Investing in the strongest areas of the markets will lead to superior performance.  When an investment loses it’s strength it is replaced with something stronger.  This is called Relative Strength investing and there is a multitude of independent research to validate this approach.  Secondly, you must know WHEN to protect the portfolio.  High Relative Strength investments are not immune to market declines.

WHEN to invest:

Traditional investment management believes in diversifying your investments and holding them for the long term.  We believe this to be no different than a sailor pointing his boat towards his destination and hoping the winds and currents take him there.



At Carlson Wealth Management we believe two things:

The Bad News – Bear market declines are devastating both financially and emotionally and difficult for most investors to hold through.

The Good News – Market advances and declines are identifiable in early stages and therefore manageable.

At Carlson Wealth Management we have developed and follow the bearometer, our market indicator which incorporates market data to identify changes in trend. We believe that there are times to be invested where it makes sense to be on offense, but there are also times to be less invested and on defense. What would happen if your favorite football team kept their offensive team on the field for the entire game? Traditional investment does just that; always invested; always on offense; always susceptible to large losses!

We are not a market timer.  We are a trend follower.  The difference is that we do not forecast the market; we do not anticipate the market; we invest based on what the market is doing.  If demand is in control and prices are rising, the model directs us to be on offense.  If supply is in control and prices are falling, the model directs us to be on defense.

This is not a trading system.  This is not aggressive.  On average the model changes direction less than a half dozen times per year.  The bearometer is proactive, tactical asset allocation directed ONLY by the changes in the markets.  Nothing else.  Again the only thing that determines the value of your portfolio is whether prices are going up or down.  Simple common sense.

More on the Bearometer


The information contained herein has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs.  Accordingly, investors should not act on any recommendation (express or implied) or information in this material without obtaining specific advice from their financial advisors and should not rely on information herein as the primary basis for their investment decisions.  Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources believed to be reliable (“information providers”).  However, such information has not been verified by Carlson Wealth Management (CWM), Dorsey, Wright & Associates, LLC (DWA) or the information provider and DWA, CWM and the information providers make no representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein.  CWM, DWA and the information provider accept no liability to the recipient whatsoever whether in contract, in tort, for negligence, or otherwise for any direct, indirect, consequential, or special loss of any kind arising out of the use of this document or its contents or of the recipient relying on any such recommendation or information (except insofar as any statutory liability cannot be excluded).  Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.  Neither the information nor any opinion expressed shall constitute an offer to sell or a solicitation or an offer to buy any securities, commodities or exchange traded products.  This document does not purport to be complete description of the securities or commodities, markets or developments to which reference is made. 

Unless otherwise stated, performance numbers are based on pure price returns, not inclusive of dividends, fees, or other expenses.  Past performance is not indicative of future results.  Potential for profits is accompanied by possibility of loss.   You should consider this strategy’s investment objectives, risks, charges and expenses before investing.  The examples and information presented do not take into consideration commissions, tax implications, or other transaction costs. 

The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy.  Performance information presented is the result of back-tested performance.  Back-tested performance is hypothetical (it does not reflect trading in actual accounts) and is provided for informational purposes to illustrate the effects of the CWM strategy during a specific period.  The CWM strategy is NOT a guarantee.  There may be times where all investments and strategies are unfavorable and depreciate in value.  The CWM strategy is not predictive. 

Back-tested performance results have certain limitations.  Such results do not represent the impact of material economic and market factors might have on an investment advisor’s decision making process if the advisor were actually managing client money.  Back-testing performance also differs from actual performance because it is achieved through retroactive application of a model investment methodology designed with the benefit of hindsight.  CWM believes the data used in the testing to be from credible, reliable sources, however, CWM makes no representation or warranties of any kind as to the accuracy of such data.