We attempt to “buy low and sell high” which we believe differs from a more traditional, passive “buy and hold” strategy. We attempt to accomplish this with the use of a 3-Phase sell process that was developed after observing what appears to be a recurring pattern within the financial markets. As the primary trend transitions from positive to neutral, and then from neutral to negative, we use this 3-Phase sell process to reduce, hedge, or sell risky investments, in favor of cash-equivalent investments. We believe this proactive action can help protect our clients’ money against significant financial loss. The foundation of the BLI strategy is based on Warren Buffett’s two rules: “Rule No. 1 – Don’t lose money,” and “Rule No. 2 – Never forget Rule No. 1.”
When successfully implemented, a sell process may help an investor reduce financial risk in the early stages of what could become a stock market downturn to attempt to save money.
If an investor is successful in limiting their financial loss under such circumstances, they may be afforded the opportunity to look for indications when prices may be bottoming to reinvest their money at lower prices in the future. When compared to a “buy and hold” strategy this may help save lost time as well. Instead of having to wait for their money to recover to previous highs, which could take years, they may be able to achieve new highs relatively quickly.