Do It Yourself Investment Strategies

As IFA’s we advise on and set up investment portfolios for clients and or help them chose where best to invest. This page is for those that might wish to make their own investments and do not require any advice. It is also for our own interest as following Dean’s analysis has become very interesting.

Dean Pignon, a client of ours for some 13 years, decided about six years ago to learn about the finer points of trading and investment strategy, having experienced the ups and downs of investments and different investment products. In particular, wondering as many do, whether the investment management industry and FSA always deserved its rewards for what seemed like low returns to clients from mainstream funds over 10 years plus.

Dean is not a licensed or regulated individual, but has now been running three investment strategies via an independent tracking platform since late January 2010. He is trying to produce and prove a strategy that is appropriate for long term investment, so that if it works, hands off investors may trust that their funds have a good chance of consistent long term growth for the future.
The information platform is Collective2 – hover your mouse here for more details.
It enables investment managers to run virtual funds and the rest of the world to see how they are performing. If any investor wants to follow any strategy, then they chose to pay a monthly or quarterly fee to the ‘Strategist of their choice’ (also known on Collective2 as a “vendor”) so that they will receive buy and sell notices as the strategist moves funds, allowing a client to invest him or herself in their own stockbroker account – a bit like an investment tip magazine that is also trying to follow a long term strategy.

We emphasise that this web section is for information purposes only, not advisory, which we hope will be interesting to self investors only. As you will see from following the links, Dean has made a lot of progress.

Do contact us if you are an advisory client and any information here triggers you to ask questions about your own fund management.

Dean is running 3 investment strategies, called the “Isonomy” series, all based around similar core concepts. They range from the relatively cautious (Isonomy) to relatively speculative (Isonomy Turbo) with one (Isonomy Plus) in-between for those with a moderate appetite for risk. Isonomy Plus has been particularly popular to date because of its relative stability combined with higher performance. Of course, no guarantees can be given but capital preservation over the long term is a key consideration.

Click on a strategy name or chart to go to the detailed page for that strategy. You do not need to register just for taking a look.

Isonomy

Based on a simple balanced asset allocation model that was extensively analysed by a man named Harry Browne in the early 1980’s. Since then it has also been analysed by other people (references on the Web abound) who have confirmed the robustness of the strategy right up to recent years. As trading strategies go it is rather boring with very infrequent trades, but it should let you sleep easy at night whilst enjoying about 8-9% annual compounded returns on average over the long term.

Isonomy Plus

Very similar to plain Isonomy but has the added spice of using a small amount of leverage (max 1.5 times) and options, which are traded around the core holdings. The leverage increases the average long term returns and the option trades provide an extra bit of return but are also used as a hedge to help reduce the higher risk due to the leverage. This one is a bit more active (but not much) and targets about 15% average compounded returns per annum.

Isonomy Turbo

Based on the same core principles of balance and asset diversification as the other two strategies but it uses options only and more leverage, though the leverage is only up to about 3 times which is still quite conservative compared to some CFD or Forex funds that you may have come across. Isonomy Turbo differs in that it is much freer to deviate from the long-only ethos of the other two and can at times also be net short of an asset class. It therefore has the greatest scope for aggressive long term absolute return in varied market conditions but, whilst fully hedged against catastrophic loss at all times, it also carries relatively high short term volatility. The trading is fairly active with an average 25% annual return target.