Methodology

If you were going to take a trip from New York City to Los Angeles, what would be the first thing you would do? Most likely you would pull out your GPS or road map. You wouldn't just blindly jump on any road and hope that it was the one that takes you to Los Angeles. The probability of reaching your destination would be pretty slim. Unfortunately, many investors jump into investments without qualified help to guide them in their financial journey. Our strategy provides us with an unbiased approach for the investment journey under any circumstances.

Bluegrass Asset Management methodologies and research tools help us see through the day-to-day clutter of market movements and provides us a clear understanding of where market strength lies at all times. Our investment guidance is objective and highly rules based. We use primary market indicators to get a measure of overall risk and analyze broad industry sectors to determine which are in favor. We want to invest in sectors and asset classes that are controlled by demand. We then select investments that have positive relative strength and have a good probability of outperforming the market. We do not feel compelled to be fully invested in stocks when an alternative investment (cash reserves) offers a more attractive opportunity. The strategies we implement are not constrained or defined by asset allocation. In fact, it is our belief that avoiding severe losses is extremely important in achieving strong market performance over the course of an entire market cycle.

One of the most important considerations when investing is determining whether to take an offensive or defensive posture. When market movements indicate significant risk, defense is suggested, and we endeavor to protect existing positions. When market trends appear favorable, offense is suggested, and we want long exposures. Bluegrass Asset Management uses technical market indicators to determine whether offense or defense is dictated.

Simply stated, Bluegrass focuses on the “price” of a security, because that is the ultimate determinant of supply and demand in the marketplace. When you cut through all the red tape on Wall Street, what moves equity prices is supply and demand. It is nothing more than Economics 101. The same forces that move prices in the supermarket move the stock market. When all is said and done, if there are more buyers than sellers willing to sell, the price will move higher. If there are more sellers than buyers willing to buy, the price will move lower. Analyzing the price action of a security or asset class can yield important information as to who is winning the battle for that security – supply or demand.