Our Philosophy

John Templeton once said that the time to buy is when there is blood on the streets. Joseph P. Kennedy famously sold all his stocks prior to the crash of 1929 when his shoe shine boy was giving him stock picks. These two examples give some insight into one of the core philosophical tenets at YieldQuest: contrarian investing. We typically look to buy when the crowd is worried whether prices will ever rise, while we remain skeptical when the crowd has become enamored of those same securities. Over time, we feel that this contrarian style may be successful because of a fairly regular waxing and waning of investment favorites; that is, today’s fallen angel may become tomorrow’s market favorite, and vice versa. We believe that by navigating between the oscillations of greed and fear, we may be able to add significant value to clients' portfolios.

These oscillations between fear and greed, in our opinion, allow pockets of market inefficiency to potentially develop. For more than a decade, we have sought to exploit these inefficiencies for the benefit of our clients. Through assiduous research, we look to capitalize on areas of the market where we believe pricing inefficiencies may be developing. We have found such inefficiencies to occur particularly frequently in a sub-space of the ETF market, namely closed-end funds.

Another philosophical tenet at YieldQuest is to constantly keep an open mind and not to assume that the best ideas are those that are propounded by our own Investment Committee. On the contrary, we actively and routinely review a number of third-party research services, as well as seek out specialist brokers and trading partners that we believe may be able to add value to our investment decision making process. This "outside the box" flexibility, combined with the aforementioned contrarian bias, has put YieldQuest in a strong position to potentially deliver attractive returns for our clients.

Finally, we view risk as a multi-dimensional variable, comprising price/capital risk, income risk, reinvestment risk and opportunity-cost risk. By viewing risk through this multi-dimensional prism, we believe we are better positioned to manage risk successfully and thereby add value both in the fixed-income and equity markets.