The strategy behind every investment is the stepping stone for success, which is absolute return from the investments made. Anthony Munk, who is currently the Senior Managing Director of Onex Corporation since January 1, 2013 defines the neutral, long-term weighting of the various classes and subclasses of an asset portfolio. The criteria in common that is used by most of the managers in selecting their assets vary widely according to them. So if you feel like choosing a fund, keep a close watch on the style in which the fund managers invest. Make sure it fits your criteria and the optimum range within the risk and reward profile.
Munk says, that nothing goes without a strategy and when it’s concerning investment, then definitely there has to be one. So what are the strategies that most of his fund managers in Onex apply?
Let’s take a look at them.
- Top to Down Investing
- Bottom to Up Investing
- Fundamental Analysis
- Technical Analysis
These Top to Down Investment strategies involve choosing of the assets that are based on the big themes. Often we find that investors make a close study of the market, anticipating whether the market is going to go through a steep rise or a fall. Depending on their studies they buy stocks across the boards. In generic cases, the managers are found to buy stocks in particular economic sectors like the industrial or high technology sector which has the tendency of out-performing when the economy is pretty strong. I
f he anticipates that the market is going to slump in the near future, the fund managers are found to sell the shares or buy them in the defensive and health care industries. The bottom up managers have the tendency of choosing the stocks depending on the strength of the individual industries, and they hardly pay any heed to the constant ups and down in the economy of the country. The edge that the top down investors have in the market is that they can do the screening of the stock in lot easier way.
The strategy of Fundamental analysis involves evaluating the necessary factors that affects the performance of the investors. While verifying a stock it is very likely to have an entire check of the financial information of the company, and that might very well entail meeting with executives, employees, suppliers, customers and even competitors of a particular company. Munk says that if one needs to analyze the management of a company, one needs to peep deep into the root that drives the company and find out where the growth comes from.
On the other hand the technical analysis choosing the assets based on the trading patterns. Again in this case, having the fundamental analysis is important as that will determine what will drive the growth of the company. The investors will always look forward to the rise of the stocks if the company’s finding some growth in their profit margin.
Anthony Munk, the expert claims that diversifying the claims enhances the balance and minimizes the chances of creating any errors. His experience counts when says so.