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Our Approach To InvestingSimply put, Research Financial Strategies is focused to place clients—and client success—over everything else. It’s a commitment to performance.
Research Financial Strategies provides our clients with a reproducible, non-emotional investment process using technical analysis to monitor market risk within the industries, sectors, and our actual investment decisions. It starts first with understanding our clients financial goals & needs and helping them plan for the future. Below is an overview of RFS’s investment process.
Technical analysis is an emotionless investment decision making process that does not allow for getting caught up in the company or industry story. Investments are made through a series of technical factors. The most notable factor is one called “relative strength.” When a security price shows a recognizable pattern of higher highs and higher lows, it demonstrates that there is higher demand than supply for that security. This means that the “buyers” are in control and not the “sellers.” While we cannot guarantee investment performance, securities that demonstrate this technical behavior have a higher probably increasing in value.
Research Financial Strategies
At A Glance
- Headquartered in the Washington, D.C. area
- 8 regional financial advisor offices in the USA
- More than $400 million of assets under management
- Private local ownership
- Professional hands-on advisory with an average of 20+ years of experience
Determining Investor Suitability
As investment advisors, it is our fiduciary responsibility to make sure we understand each of our client’s investment tolerance and risk profile. Research Financial Strategies has the unique capability to create unlimited customized asset allocation blends for our diverse client base. We specializes in providing financial advice using a proprietary investment methodology that leverages technical analysis to identify and protect our clients against stock market risk.
Determining When To Invest
The oldest law of economics is supply and demand. At RFS, we place a premium on when to make an investment decision based on price movements using technical analysis. Technical analysis is an emotionless investment decision making process that does not allow for getting caught up in the company or industry story. Investments are made through a series of technical factors. The most notable factor is one called relative strength. When a security price shows a recognizable pattern of higher highs and higher lows, it demonstrates that there is higher demand than supply for that security. This means that the buyers are in control and not the sellers.
Determining When To Exit An Investment
Our ability to minimize portfolio risk for our client is a result of having a Sell-Side Discipline. Prior to investing in a security, we establish an exit point based on the percentage of loss or price our investment advisors determine is acceptable. If the security price is violated, then it is sold. This ensures that profits are protected for our clients, or worst case, risk to principle is minimized. Only through having an investment approach that has a pre-determined exit strategy for each investment position, can you mitigate portfolio risk during market corrections.
The typical financial advisor is "set it & forget it"
Modern Portfolio Theory – since the 1950s, Wall Street has propagated this approach to long term investing. Often called “set it and forget it” or “buy and hold”, Modern Portfolio Theory advocates making long term investments in asset classes and securities based on a person’s horizon, required market return, and investor suitability. Market returns are based on holding for the long term (50+ years) of defined asset classes. Once the portfolio is constructed using mutual funds, it is held for the long term with yearly re-balancing. Use of higher cost mutual funds reduce bottom line returns.
Fundamental Analysis – Fundamental analysts attempt to study everything that can affect the security’s value, including macroeconomic factors (like the overall economy and industry conditions) and company-specific factors (like financial condition and management). Traditionally used with portfolios that have stocks versus mutual funds. Sudden market influences such as global events and weather can disrupt Fundamental Analysis.
Our Difference
Research Financial Strategies specializes in providing financial advice using a proprietary investment methodology that leverages technical analysis to identify and protect our clients against stock market risk.
Here is where most financial advisors fall short:
Modern Portfolio Theory does not allow for investors to mitigate portfolio risk during down markets. They assume that historic returns over long periods of time that are longer than an individual’s investment horizon apply. Would you be willing to ride out a 40% loss in your portfolio during each of the last two bear markets?
Fundamental Analysis assumes that investors will be rational and invest based on corporate & industry fundamentals and economic conditions. The problem with this theory is the stock market projects investor sentiment for the future and no one knows exactly how far they are looking out. In addition, there is commonly a disconnect between the stock price and corporate earnings.
Mutual Funds vs ETFs
Mutual Funds charge higher fees and yet their returns aren’t any better than ETFs. If you have a $200,000 portfolio, just a 1% difference in fees compounded over 20 years at 7% will cost you over $87,000!
In conclusion
Research Financial Strategies proprietary methodology that leverages technical analysis means we can avoid the pitfalls of institutionalized money management—and focus instead on achieving real returns for each client.
Simply put, Research Financial Strategies is focused to place clients—and client success—over everything else. It’s a commitment to performance.