Active Risk Management

We have used a disciplined active risk management (ARM) approach for our clients since 1983, and the Merriman Global Diversification Program (GDP) has been our core program in this strategy for more than 10 years. We have designed the GDP to take advantage of the best research and tools at our disposal in order to seek attractive returns for risk-averse investors.

The program uses a combination of trend-following timing systems and a broad array of asset class mutual funds and exchange traded funds (ETFs) as an effective way to reduce risk. We don’t rely on predictions of market activity; instead, we identify existing market trends and attempt to time the market – to get out of the market when the market is going down, and to get back in when the market is going up.

For anyone who can’t risk or tolerate a sharp drop in their portfolio value, this approach can increase peace of mind and decrease the risk of running out of money. But, market timing is both operationally and emotionally difficult to do on your own. It’s time consuming and requires a tremendous amount of discipline. That’s where we can help.

Every business day, we update our market timing systems and our fund-timing systems, scanning thousands of mutual funds and ETFs for buy and sell signals. If our timing system for a mutual find or ETF in an asset class gives us a sell signal, that slice of the portfolio is invested in a money market fund. Each asset class in the portfolio is timed independently.

Our mechanical approach allows us to stay purely objective and keeps us from getting side-tracked by emotions or market and economic forecasts and predictions. We have the discipline to make the trades as indicated by the appropriate signal.

We also have an active research and development program to evaluate and develop new market-timing systems. Although changes are infrequent, this on-going process helps us maximize risk-adjusted returns for our clients. This program, like all our investment strategies, will continue to evolve as we find new ways to pursue this objective.

To find out more about this program, call us at 1.800.423.4893 or click here to schedule a free consultation with one of our financial advisors.

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