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Award-Winning Tactical Strategy

Available as a subadvised mutual fund

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Available as a Separately Managed Account (SMA)

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A Different Approach to Tactical Investing

The tactical investment style is a broadly defined category with a wide array of strategies and asset classes. From the ashes of the 2008 market crash arose a proliferation of tactical strategies that employ quantitative models to adjust asset classes and sectors, mostly through the use of index ETFs, with the goal of avoiding market declines.

At Lyons, we believe in the power of long-term equity value investing, but recognize that a buy-and-hold approach is subject to harmful losses during periods of sustained market declines. In our view, the prudent use of tactical allocation is to maximize the opportunity for investment compounding for as long as possible, and attempt to minimize the impact of only the larger market declines that harm cumulative returns.

 

 

Our Philosophy

Sustained Declines Matter Most

Short-term market corrections are common during secular bull markets. In fact, they are often needed to keep stocks fairly valued. These pullbacks often recovery quickly with little or no harm to the long-term investor, and may even present good opportunities to invest at lower prices.

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Less Is More

A slower, more focused tactical strategy that aims to ignore the short-term noise has a greater likelihood of staying invested during a bull market, without making shifts to defensive asset classes such as bonds when risk is relatively moderate. The opportunity is the potential to improve compounded growth over time.

 

The Lyons Approach

Offense First, Defense Next

Our tactical approach seeks to remain fully invested in equities during secular bull markets, and shift defensive only during extreme drawdowns historically associated with bear markets. We employ a proprietary quantitative risk model intended to filter out relatively lower risk periods that tend to recover quickly. By spending less time on defense, we offer greater potential for compounded wealth gains over time.

 

Individual Stock Selection

While remaining invested in stocks, we are relative value investors in U.S. mid and large cap dividend stocks. We use a model-based process to identify high-performing companies that are attractively valued relative to peers.

 

Downside Protection

We've constructed a systematic approach intended to capitalize on the fundamental market price shifts that often precede bear markets or other prolonged periods of heightened market risk. We call this the Quantitative Risk Indicator (QRI). The QRI focuses on minimizing the impact of bear markets. It assesses market conditions on a monthly basis and drives our allocation between equities and Treasuries.

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Portfolio Construction

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