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Investment Strategy

A sound investment strategy is essential for navigating the dynamic market conditions, mitigating risks, and achieving long-term success. It should be tailored to individual goals and objectives, taking into account the ever-changing nature of markets and employing proven tactics. By prioritizing client needs over growth strategies, boutique firms like Paragon Capital Management, LLC can offer customized approaches that serve high-net-worth investors effectively.

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Why is a good investment strategy crucial in today's market conditions?

An optimized portfolio for changing market conditions isn't easy without a sound investment strategy.  

Markets are constantly changing, and different tactics are needed for different market conditions. A good investment strategist needs to have experience with changing markets and have well-proven tactics that apply to strategies to keep a portfolio from having a catastrophic downturn or even taking on too much risk.

Unfortunately, many firms prioritize a growth strategy for their firm that can conflict with the growth strategy of your portfolio. Their predetermined investment allocations might not be a well thought out investment strategy specifically for one client but for the majority of the investors that come to this firm.  

Sometimes larger firms' revenue strategies take a less custom approach for their clients. They look to grow by hiring advisors who can sell standardized investment solutions that are easier to manage at scale.  They put prospects and potential clients into a handful of portfolio structures that are easier and quick to sell,  a cookie-cutter approach to investing. A fast-growing investment advisory firm cannot afford to have investment advisors make mistakes or do much strategic thinking. Advisory firms need systems and predetermined investment solutions that benefit most investors. These portfolios might work for 65% of the public, but the strategies and asset allocations are passed down from management.

It has been a tendency for all excellent investment advisors with the best investment strategies to eventually go out on their own because they are client-focused and desire to serve their clients better.   These advisors will develop relationships with high net-worth individuals who need a better-tailored portfolio because their needs differ greatly from the general public. Scutany is always warranted by the investor, though; just because a firm is smaller and independent doesn’t always me a better investment strategy.   However, we have found this to be true with many boutique firms, which is one reason we started Paragon Capital Management, LLC.

The bottom line of investment strategy is that the person or firm with the best strategy for your goals and objectives, whether growth, wealth preservation, income, or tax-efficient investing, is probably the best choice for your wealth management. There is no perfect formula or asset allocation; the magic behind doing well long-term comes from the investment strategy and tactics used in different market conditions.

We believe the wise investment strategy wins over the long run. We strive to become better investment strategist because we believe this servers our clientele better. Our concierge approach of severing high net worth investors give them a customized strategy for their goals and objectives.

Finding the Right Investment Strategy for Your Goals and Objectives

Having a sound investment strategy is crucial in today's market conditions due to the constant changes in markets and the need for different tactics to adapt to these changes. An investment strategist must possess experience in dealing with shifting markets and employ well-proven tactics to mitigate the risk of a portfolio experiencing a catastrophic downturn or assuming excessive risk.

Unfortunately, many firms prioritize their own growth strategy, which can conflict with the growth strategy of your portfolio. Their predetermined investment allocations may not be a well-thought-out investment strategy tailored specifically for individual clients, but rather a strategy designed for the majority of investors associated with the firm.

Larger firms often adopt a less customized approach to revenue generation for their clients. They seek growth by hiring advisors who can sell standardized investment solutions that are easily scalable. These firms tend to place prospects and potential clients into a limited number of portfolio structures, following a cookie-cutter approach to investing. This enables them to sell quickly and efficiently, but it restricts strategic thinking and increases the risk of mistakes. Advisory firms require systems and predetermined investment solutions that benefit the majority of investors. While these portfolios may work for 65% of the public, the strategies and asset allocations are determined by management.

It is a common trend for exceptional investment advisors with the best investment strategies to eventually establish their own practices, driven by their client-focused approach and the desire to better serve their clients. These advisors build relationships with high-net-worth individuals who require tailored portfolios due to their unique needs. However, it is important to exercise caution as an investor, as a smaller and independent firm does not always guarantee a better investment strategy. Nevertheless, we have observed this to be true for many boutique firms, which motivated the establishment of Paragon Capital Management, LLC.

In essence, the key to an investment strategy lies in finding the person or firm that offers the best strategy aligned with your goals and objectives, whether it's growth, wealth preservation, income generation, or tax-efficient investing. There is no perfect formula or asset allocation. Long-term success stems from employing the right investment strategy and tactics in response to different market conditions.

At Paragon Capital Management, LLC, we believe that a wise investment strategy prevails over the long run. We continuously strive to improve our skills as investment strategists, as we firmly believe that this benefits our clients. Our concierge approach focuses on serving high-net-worth investors, providing them with customized strategies tailored to their goals and objectives.

The etymology of the Word “Strategy.”

It is always helpful to understand the origins of a word to understand its meaning fully.   The word strategy comes from the French word “stratégie” A fundamental definition from the French is “the art of a general” the french word is derived from Greek, strategia "office or command of a general," from strategos "general, commander of an army."\

The word “strategy” entered the English language in the 1590s from the French word “stratégie,” which in turn came from the Greek word “strategia.” The Greek word is a compound of the words “strategos” (meaning “general”) and “ago” (meaning “to lead”).

In ancient Greece, a strategos was a general responsible for the overall planning and execution of military campaigns. The word “strategia” came to be used more generally to refer to any plan or method for achieving a goal.

Here are some additional details about the etymology of the word “strategy”:

  • The Greek word “strategos” is derived from the words “strato” (meaning “army”) and “agos” (meaning “leader”).
  • The Greek word “ago” is also the root of the English expression “act.”
  • The English word “strategy” is first attested in the 1590s.

How the word Strategy is commonly misused.

A common misperception  is that strategy means "a plan to do something." While it is true that part of the strategy involves devising a plan of action, it is much broader than that. Strategy requires understanding goals, resources, and competition and involves mindful and strategic decisions.

Many people and organizations have plans without a strategy. The plan may not connect with purpose and direction, as the person or team may not have considered the larger context, goals, or resources needed to carry out the plan. Without utilizing a strategy, the plan could lack the necessary flexibility to respond to changing circumstances or may not consider how the plan will truly help the team or organization reach its goals.

Sometimes the word “strategy” is used interchangeably with “plan.” However, there is a difference between the two words. A plan is a detailed outline of achieving a goal, while a good strategy is focused on overcoming potential risks. The strategist will identify and measure risk and have several thoughts on mitigating risk. An excellent strategy to handle opposition to the plan considers several moves an opponent might take and has several “moves” for these events. A good strategist considers several opponents that can ill affect an investment.

Most investment advisors need to be better strategists. Prominent firm investment advisors have a predetermined asset allocation for every risk tolerance test they give. They might be slight variances in the allocation size but do not build a portfolio of individual stocks and bonds. They also have limited or no alternative investment choices. The bottom line is that they have asset allocations handed down from the mothership and are told the strategy.

Missing the Mark with Strategy

  1. Doing the same thing over and over again and expecting different results.
  2. Having a plan without the backing of clear metrics to measure the plan's success.
  3. Not using data to inform decisions around strategy.
  4. Not having a feedback loop for continual optimization of the strategy.
  5. Relying too heavily on intuition over data analysis.
  6. Overcomplicating the strategy in an attempt to appear impressive.
  7. Being too rigid and inflexible with the strategy to accommodate unexpected problems or changes.
  8. Assuming the strategy is fixed and not revisited when goals and conditions evolve.
  9. Not involving a variety of stakeholders in determining and implementing strategy.
  10. Creating a strategy without considering all people, processes, and resources available.
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