Content Library

Origin Story: Standpoint

Why does the team at Standpoint believe advisors and investors want another investment product in an industry that already has over 8,000 mutual funds?

Key Takeways

  • Blending multiple assets into a single strategy allows investors to experience the benefits of diversification without the psychological trauma of managing all the assets separately.

  • The experiment Eric is referring to is the blind taste test.

Transcript

Eric Crittenden: Adopting an all-weather philosophy for a firm was a little bit of a humbling experience. It's how I personally like to invest and has been for a really long time. It's a little embarrassing to admit that I wasn't convinced, it never really occurred to me that maybe financial advisors and individual investors would like to invest this way. For some reason, in our industry, we always make the assumption that what they want from us is to specialize in one thing and deliver one ingredient and that they'll mix the portfolio up together how they see fit.

That works with stocks and bonds because stocks and bonds are expected. They get a free pass in the sense that if stocks do poorly, people still understand why they're in the portfolio. Likewise, if bonds do poorly, they understand why those are in the portfolio and they're willing to stick with it. However, when you deviate from stocks and bonds and you go into some other asset classes, something changes. Something changes in the psychology of investors and they feel like I would have been so much better off if I hadn't gone into these other asset classes, whether those are commodities or currencies or what have you.

Something else happens though, if you take the initiative and you blend the alternatives in with stocks and potentially bonds yourself and you deliver the actual diversification benefit. Not the opportunity for diversification benefit, not the individual ingredient, you do it yourself. You offer that. All of a sudden, the cyclicality comes out of it. It becomes much less volatile, and it doesn't stomp on people's emotions so much.

I did this experiment. I've been doing it for years now where I show people alternatives on a standalone basis, stocks on a standalone basis and then mixed together, but I don't tell them what I'm showing them. I call it the blind taste test. Almost 100% of the time, people gravitate towards the blended products where you're mixing alternatives with stocks and they say, "That's what I want. If you had that, I would be very happy."

They don't want the alternatives on a standalone basis because they look and feel so different from just stocks or just bonds. It occurred to me, this is how I invest, I think it's a very durable portfolio, and I love this all-weather approach. I'm preparing as best I can. I think that's the way to win the marathon in the long-term, and clients like it, so why would they offer that product? So, standpoint was born.

Standpoint Updates

Sign up for monthly updates

Scroll back to top

Important Disclosures

Views are as of the date of the respective video, article or web page and are subject to change based on market conditions and other factors. The views expressed herein represent the opinions of Standpoint Asset Management, LLC (Standpoint) and are not intended to predict or depict performance of any particular investment. All data provided by Standpoint including any reference to specific sectors is provided for informational purposes and should not be construed as investment advice. It does not constitute an offer, solicitation, or recommendation to purchase any security. These views presented are subject to change.

Standpoint is an investment advisor registered with the US Securities and Exchange Commission (SEC). For more information regarding the firm, please see its Form ADV on file with the SEC. Registration with the SEC does not imply a particular level of skill or training.

All investing, including all weather investing, involves a certain amount of risk. The all-weather investment approach strives to distribute and control risks but may reduce the potential returns of the portfolio. While all-weather investing aims to provide stability through various market conditions, investors should be aware of the potential risks and limitations of the strategy and consider their own risk tolerance and investment objectives before implementing it.

Investing in securities involves risk of loss that investors should be prepared to bear. Past performance is not indicative of future results.  Investment return and principal value will fluctuate so that an investor's shares, when sold or redeemed, may be worth more or less than the original cost. Diversification does not guarantee a profit or protect against a loss.

Standpoint does not endorse and is not responsible or liable for any content, advertising, products, services, or information on or available from third-party websites or materials. Standpoint may use content on this website that has been supplied by companies that are not affiliated with Standpoint (third-party data). Any third-party data contained on Standpoint’s website has been obtained from sources believed to be reliable, but the accuracy or completeness of the information cannot be guaranteed.

Standpoint is committed to make this website accessible to all audiences, including people with visual, hearing, mobility, and other disabilities. Reasonable efforts will be made to accommodate all users who utilize standard compliant web browsers, as well as enabling software or assistive technology.

If you are having any problems accessing the information found on this website, please contact us for assistance. Please note the nature of your accessibility problem, the format in which you prefer to receive the material, the web page address of the requested material, and the best way to contact you.

Please contact us via email at info@standpointfunds.com or by calling (602) 688-2918.