Merit Advisors was founded on a simple and basic principle: Managing risk of loss is critical in order to generate consistent, positive returns over the long-term. Based on this tenet, Merit developed a proprietary investment model that has yielded positive returns in 25 of its 27 years in existence. Our belief in our founding principle has been validated by the performance of our model over time and the returns it has generated in excess of our benchmark.
Timing is a dominant component of investment success. Therefore, Merit developed our model to signal the optimal times to have exposure to the market. When the model gives a “buy” signal we invest in mutual funds and when it gives a “sell” signal we retreat to the safety of money market funds. By minimizing losses, our returns accrue to net gains instead of recovering lost principal.
This strategy has been consistently successful at avoiding capital losses. In fact, in the 27-plus-year history of our firm, we have only had two years with negative returns. One of these years occurred in 2008 when we were down 1.96% (after deducting the highest advisory fee charged to any client). Comparatively, the S&P 500 and the Lipper High Yield were down 37% and 28%, respectively. With our low historic losses, our managed bond strategy is attractive as a tool to reduce overall portfolio volatility. It is also an excellent option for investors who are risk-averse or have shorter investment time horizons, such as those nearing or enjoying retirement.
Merit provides investment management services to registered investment advisors who engage us to provide “buy” and “sell” signals from our strategy for use with their own clients. Alternatively, we can act as a third-party advisor, executing trades and collecting advisory fees from the custodian while providing quarterly reports to both the client and the advisor.
We also act as a traditional investment advisor for high-net worth individuals, families, foundations and endowments.