Although “Numetrix” is not a word in the English language, we believe the name has great meaning in relation to the business of portfolio design and investment management.
We purposefully chose to begin the firm’s name with “Nu” to indicate that we are taking a new approach to many aspects of portfolio design and management.
First and foremost, Numetrix takes a new approach to selecting managers and strategies. A core tenet of our investment philosophy is that a multi-manager, multi-strategy, and multi-methodology approach is superior to traditional asset allocation or classic “market portfolio theory.”
We believe that the status quo to multiple manager, multiple strategy investing is inherently flawed. The typical advisory firm relies on subjective allocations to managers and their strategies. The problem is advisors tend to chase the ‘hot dot’ performer after bull markets have run and then over-allocate to conservative asset classes after big market declines. In short, this means many advisors wind up ‘buying high and selling low’ for clients, which simply is not a recipe for success!
History shows that both advisors and clients alike are very good at preparing their portfolios for what has already happened. Ask yourself, how many advisors thought that moving to a more defensive strategy after 2008 would help their clients going forward?
In reality, such an approach caused clients to dramatically underperform during the great run in stocks that ensued.
What clients really need is a method to proactively adjust the strategies employed in their portfolios as bull markets morph into a bear markets and vice versa. And THIS is what Numetrix is all about.
Thus, Numetrix believes that new techniques for portfolio design and new metrics for diversification are needed in today’s fast-paced market environment.
In addition, Numetrix takes a new approach to performance metrics. Investors typically compare their investing returns to the stock market indices. However, for most investors, the stock market alone may not be an appropriate measurement metric. Therefore, it is vital to create the proper measuring metric for each portfolio.
In sum, we strive to help investors and advisors alike recognize the importance of setting expectations and employing the appropriate diversification and performance metrics.