Our Investment Philosophy

The bottom line is that we manage money differently than our competitors, and we embrace approaches and philosophies that set us apart from our mainstream peers. Based on our experience actively managing accounts for more than 20 years, we believe:

• To succeed over the long term in dynamic markets that are constantly changing and evolving, the investment approach must be both disciplined and flexible.
  
• Stock market forecasts are entertaining and make nice headlines, but they are not useful for making money.
  
• Making investment decisions based purely on fundamental analysis is a mistake. Even if your analysis is completely correct, nothing happens until investors begin to buy or sell. At Paragon, quantitative models drive our investment process, followed by technical and fundamental analysis.
  
• Application of behavioral finance investment theory is useful in determining portfolio allocation. Crowd sentiment is an important factor that must be constantly measured.
  
• Traditional methods of fund selection focus on long-term track records, even though research has repeatedly shown that such data in not indicative of future performance. We focus on what the sector is doing now, not what it has done over the past three to five years.
  
• Spreading a portfolio across all major market segments in the name of diversification is a cop-out. Why invest in sectors that are going nowhere?
  
• Most low turnover managers are overpaid for what they do. How difficult is it to buy some stocks and watch them go up and down forever?
  
• Portfolio turnover, in and of itself, is not a bad thing. Also, simply focusing on fund expenses, rather than what an investor earns, is a big mistake.
  
• Matching the performance of the S&P 500 is not particularly impressive. If that is the objective, investors may as well purchase an index fund.
  
• Our clients pay us to actually manage their money, which means actively adjusting, moving, and changing their portfolios based on market conditions. This is what most clients believe their managers are doing, when in reality, most money management firms do not provide this service. They usually diversify across all asset classes and take a "buy, hold and hope" approach.