Investment Philosophy

Our primary goal is to maximize profit through stock price appreciation while minimizing risk. We concentrate on individual stocks and ETFs, which is a bottom-up approach to investing. However, we are cognizant of the relative weighting of our portfolio by sector and industry. Trading equities based on macro issues within or across sectors, industries and markets is known as a ‘top-down’ investment strategy. Our bottom-up approach means we watch the buy/sell indicators at the individual equity level. This does not mean we ignore broad market movements, both domestically and globally. When we find a broad market opportunity, we look for the best ETFs to own that take advantage of those market moves.

As for risk, our portfolios have been rated by RiskGrades™ as being in the top 5% on a risk adjusted basis, when compared to the S&P-500. That means that 95% of the equities in the S&P-500 are, typically, riskier than the equities in the TurnerTrends portfolios. What this says about the TurnerTrends portfolios, is we do not invest in penny-stocks, highly volatile stocks, or speculative stocks. We treat our portfolios like we are investing our own money - because it we are.

We endeavor to purchase equities that have begun an upward movement in pricing and sell those equities when they have moved beyond their peak and have begun a downward movement in price. It is likely we will purchase these same equities again at a much lower market price and then sell them later at a much higher value, over and over.

When given the choice between two similar equities, we will typically purchase the equity that pays the higher dividend. We use the weekly setting of Stop Losses as our primary selling strategy.

In addition, we firmly believe in a disciplined approach to investing, which is one of the key elements in any investment strategy. Discipline, in the TurnerTrends investment strategy includes:

• Elimination of Emotion
  We trade only when the buy/sell triggers in the TurnerTrends stock analysis software say its time to trade.



• Staying the Course
  We have a system that we believe in. It makes money for us and our subscribers. We won’t change just because the markets go against us, or when conventional wisdom says to ignore our trading methodology. We make incremental improvements to our systems over time, but do not change our strategy just because we experience a downturn in our short-term performance.



• Diversification
  We believe in diversification of our portfolio, including:
  
  • No more than 20% in any one Industry designation
  • No more than 30% in any one Sector designation
  • Equal amounts invested across all stocks in the portfolio


• Market Bias Trading
  We will take more long positions when the market sentiment is trending upward and more short positions when the market sentiment is trending downward.

We use an in-house developed computerized modeling system that tracks both the technical trend (see Technical Analysis) coupled with a growth-oriented Fundamental Analysis. Each week, after the markets close, our database of stocks is updated with the week’s pricing data.

Then, the mathematical models are run against the database where the technical trend and fundamentals are evaluated. In addition, we calculate each stock’s historical volatility and a statistically accurate estimate of the amount of pricing movement expected for each stock for the upcoming trading week.

After evaluating the complete database of stocks, and assuming we have cash available, we narrow our selection to the best-of-the-best positions within our diversification constraints of both Sectors and Industries.

We believe that overall sentiment of investors is a critical characteristic to consider when trading equities. The key tool we use for this element of our trading philosophy is our proprietary Market Sentiment chart and Counter Cyclical Market Forecast. It is important to note that nearly all of the better stocks, over the past several decades have made their upward moves when the overall market sentiment was strong. And historically, three out of four stocks have followed the general market trend - up as well as down.