Overview
Conservative
Active
Performance

Strategies Overview

A strategy is a long-term plan of action designed to seek to achieve a specific objective or objectives. Our strategies focus on return and the risk associated with obtaining that return. Strategies are especially important in modern times as conditions of relative stability rarely occur for any great length of time, for example a bear market (as defined by a 20% drop, or more) occurs on average every 3 ½ years, and lasts almost 11 months.

One notable exception is the bull market of the 1990’s which excellently illustrates the point. The 90’s made everyone an investor, as it was difficult to make a mistake, but the false sense of security caused few people to be prepared for what was to come when the bubble burst.

As no one can predict consistently when market declines will happen or how long it will take to recover, this is where the discipline strategies apply become so important. Although market declines tend to be relatively short, there are notable exceptions such the 1929 crash where it took investors 16 years to restore their investments, had they invested at the high, or the more recent 2000 decline where it took almost 5-years to recover. To further complicate matters, trying to time these bear market declines require two near perfect actions – getting out at the right time and getting back in at the right time.

To be able to take advantage of the bull markets and minimize the impact of bear markets Carl F. Petersen, Inc. utilizes various strategies depending on the objectives sought after.

We believe in a disciplined approach to investing and utilize our proprietary quantitative methods to achieve our results. All our strategies are not only created from the ground up to serve specific objectives, but they are also thoroughly back tested in some cases over thousands of stocks over several decades to minimize, or if possible completely eliminate, curve-fitting.

Although our proprietary quantitative strategies differ markedly from each other, they all focus on risk adjusted returns, and can be divided into conservative strategies, which seeks beta (return from "passively" holding a portfolio), and active strategies, which seeks alpha (value-added return from active management).

The conservative strategies utilize large-cap stocks, mutual funds with proven performance records, or both, in order to achieve our objectives. Furthermore, they are evenly split between growth and value stocks. The selection of the securities is instrumental for the performance, while the diversification aids significantly in minimizing the risk.

The active strategies seek to exploit trending opportunities in daily markets worldwide. These opportunities include, but are not limited to, Equities, Exchange Traded Funds, Mutual Funds, Currencies, Commodities, and Interest Rates. The investment instruments selected are leading instruments from their respective fields and categories in order to insure adequate liquidity.

Although past performance is no guarantee of future performance, our disciplined approached to investing, significantly aids us in understanding the market cycles and thus serving our clients better.