Risk Management Investment Philosophy & Process

At L&S Advisors, risk management is our top priority. It’s at the heart of every investment strategy, portfolio, and client relationship. And it’s all powered by the L&S Risk Pulse™, our proprietary measurement and analysis of current market risk.

Whatever your investment goals—from protecting your assets to aggressively pursuing growth—we believe that predicting and managing risk is the key to potential success. That’s the philosophy and purpose behind L&S Risk Pulse™.

L&S Risk Pulse™ is our proprietary, real-time evaluation of overall market risk. Based on the best of both quantitative and qualitative analysis, it’s a rigorous and deeply thoughtful process that weighs market risks in a unique way to help us determine when we should take steps to try to reduce downside exposure and safeguard portfolios. We rely on it to inform our investment decisions in an effort to better serve investor goals.

The L&S Risk Pulse™ Investment Process

Research & Data Tracking. L&S Risk Pulse™ starts with extensive, continuous economic research and risk tracking as we gather data from a wide range of financial databases and industry sources. Then we distill our research into a dynamic, real time proprietary mosaic of data points which we continuously monitor, analyze, and refine.

Quantitative & Qualitative Analysis. Using our own expert insights to filter through the noise, we focus in on what we believe to be the most important current gauges of risk. The goal is to understand and anticipate the movements of economic indicators, market prices, and business cycles so we can more accurately respond to risk. Based on this combination of hard data and professional experience, we deliver our current evaluation of market risk—along with a detailed analysis explaining our thoughts and insights.

Strategic Investment Decisions. We rely on L&S Risk Pulse™ to inform our investment decisions in our pursuit of better managing risk. Our seasoned portfolio managers apply the current evaluation of market risk to their respective strategies making adjustments as they deem necessary in an effort to minimize downside exposure and maximize upside opportunities according to their unique investment objectives. At every step, we remain vigilant taking action when we spot warning signs and red flags.

Personalized Portfolio Protection. The actions we take are specific not only to each strategy—but to each client. For example, in times of elevated risk, we may move to cash for investors who prioritize downside protection while rotating to defensive equity sectors for those who are seeking more aggressive growth. It’s a methodical yet flexible approach which enables us to pursue a wide variety of personalized investment goals.

Current L&S Risk Pulse™

Last Updated 12/8/2017

Medium +

Core economic indicators are healthy, but markets indicate potential near-term volatility and/or mild correction. Valuations are trending high.

For our full L&S Risk Pulse™ Insights, click here.

L&S RISK PULSE™ LEVELS

Lowered (Green)
Risk levels are minimal, with global economies expanding and healthy. Markets are undervalued or fairly valued.
Lowered + (Green-Blue)
Risk levels are low, as economic conditions remain sound. Low near-term market volatility may be present, but risk of correction is low. Markets are fairly valued.
Medium (Blue)
Fringe data points may show levels of elevated risk, but composite risk levels are low. Markets are fairly valued or just slightly overvalued.
Medium + (Blue-Yellow)
Core economic indicators are healthy, but markets indicate potential near-term volatility and/or mild correction. Valuations are trending high.
Caution (Yellow)
Long-term macroeconomic conditions are strong, but at least several core economic indicators show weakness with noteworthy but outlying risk that requires monitoring. Valuations are approaching high for a majority of stocks.
Caution + (Yellow-Orange)
The composite economic picture is mixed or unclear, indicating confusion in global markets. Valuations are questionable and volatility must be monitored.
Elevated (Orange)
Global economic conditions are mixed and core economic indicators are deteriorating. Valuations are questionable and volatility must be monitored.
Elevated + (Orange-Red)
Global economic conditions are weak and/or markets are overvalued. Volatility is high and the risk of a non-recessionary market correction is elevated.
Critical (Red)
Core economic indicators point to a global economic slowdown and/or acute risk in a specific but highly significant market. Valuations are extremely questionable for a majority of stocks, with potential for a substantial market correction.
Critical + (Dark Red)
Systemic risks threaten the markets. There is imminent danger of global recession, and a corresponding secular bear market is probable.
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