Methods of Analysis and Investment Strategies
Methods of Analysis
Changing economic conditions and different market cycles offer different investment opportunities. Reid & Rudiger’s primary method of analysis uses a combination of fundamental and technical considerations:
Fundamental analysis involves the fundamental financial condition and competitive position of a company. Reid & Rudiger analyzes the financial condition, capabilities of management, earnings, and new products and services, as well as the company’s markets and position amongst its competitors, in order to determine the recommendations made to clients. The primary risk in using fundamental analysis is that while the overall health and position of a company may be good, market conditions may negatively impact the security.
Technical analysis involves the analysis of past market data rather than specific company data in determining the recommendations made to clients. Technical analysis may involve the use of charts to identify market patterns and trends which may be based on investor sentiment rather than the fundamentals of the company. The primary risk in using technical analysis is that spotting historical trends may not help to predict such trends in the future.
When evaluating securities, Reid & Rudiger uses a top-down approach to first identify general market conditions. This analysis is then applied to determine the direction of the overall market and which asset classes and/or industry sectors are poised to provide the best return on capital. Once that level of analysis is complete, Reid & Rudiger isolates individual equities and/or ETFs that offer the most attractive risk reward potential for clients’ portfolios. On a more limited basis, option strategies are used to hedge individual positions or portfolios.
The firm utilizes a market-adaptive strategy with a foundation built on the basic supply and demand equation. Reid & Rudiger’s strategy encompasses relative strength, trend analysis, and pattern recognition techniques. The firm attempts to select high performing securities and will invest capital in a broad spectrum of areas, from blue chips and large-capitalization securities to growth stocks of a small- and mid-capitalization range. Overall, the firm seeks to identify and exploit both short-term and long-term micro and macro trends within an overall aggressive growth model. Reid & Rudiger believes timely exposure to specific industries and subsectors can provide strong portfolio performance.