Preservation of Capital is Critical

  • The best way to compound is avoid major drawdowns

  • Historically, the equity markets have declined 32.4% every 4.1 years

  • If you lose 32%, you need a 47% increase to return to break-even

Markets are Cyclical and will Regress to the Mean Over Time

  • Competition drives mean reversion

    • return on invested capital will regress to the cost of capital

  • Human nature is pro-cyclical (buy high, sell low) while fundamentals are counter-cyclical

  • Risk Premiums and expected returns are not static but vary over time

Value Investing has Outperformed the Overall Market since 1926 

  • In the short-term, asset prices are volatile and can be temporarily driven from their intrinsic value

  • In the long-run valuations regress-to-the mean

  • An asset’s long-term expected return and risk-reward are best determined by valuation measures

​Keep Expenses and Tax-burden Low

  • Wall Street Charges too much for poor performance

    • Most Domestic stock funds under-performed their benchmark over the past five years (Standards and Poor's SPIVA US Scorecard)

  • According to Morningstar, the average expense ratio of actively managed stock funds is 1.39% (January 2015)

  • Historically, equities compounded at approximately 6.5% before inflation (Ibbotson)

    • Management expense ratios are 21.4% of historic real return

    • $100,000 invested for 25 years at 6.5% is:  $482,770

    • $100,000 invested for 25 years at 5.1% is:   $346,791

      • Money Management Fee over 20 years:  $135,979

Free Markets Capitalism is the best economic system to allocate resources (land, labor and capital).  Low taxes,  low regulation and a stable currency allow entrepreneurs to compete and innovate. This competition and innovation leads to increased productivity, real GDP growth and increased living standards. As responsible investment managers, our goal is to grow clients' wealth by maintaining a diversified and value-driven investment portfolio, managing risk and preserving capital in bear markets.  We strongly believe capital preservation is essential to long-term wealth accumulation.

While no on can predict the future, we know that fundamentals are cyclical and the market's risk-reward varies over time. To grow our client's savings in a responsible manner, we maintain a long-term approach that creates value-driven, diversified and balanced portfolios. 

Responsible Investment Management                                     Investment Advisor in Summit , NJ                             

                                                                                                                                                                                                                                                                                                       financial advisors in Summit, NJ                                  

Manley Capital Management, LLC

Capital preservation is critical to investment success

Markets are cyclical and regress to the mean

Valuations best determine future returns