Advantage Investing employs a Multi-Discipline approach to analyzing and evaluating risk levels in the marketplace. Our model is based upon research from several sources, most notably by Dr. Vikram Mansharimani and Dr. Robert Shiller. The concept behind a multi-discipline approach is to make use of knowledge and analytical processes from various applied sciences, as they can be related to the investment management process. While our model draws heavily upon the field of Economics, it also includes ideas from the studies of Psychology, Political Science, and Biology. The Multi-Discipline approach allows us to understand our overall position in the economic cycle, as well as identifying periods of increased risk and potential asset bubbles.
The 6 Stage Economic Cycle
A core component of our investment management process is a 6 Stage Economic Cycle. Over a typical cycle from expansion (Growth) through contraction (Recession), the economy can be viewed through six specific stages. These are: Late Recession, Early Growth, Growth, Late Growth, Early Recession, and Recession. Each of these stages helps us to identify which assets to buy, sell, or hold within each strategy based upon our position in the cycle.
