Investment Process

Our investment process provides both objectivity and transparency, helping to ensure ongoing engagement with our clients and advisor partners.


Our Investment Process and the Disciplined Leadership Approach™

At Barometer, we follow a Disciplined Leadership Approach™ (DLA).

This approach is designed to take advantage of the relative strengths of asset classes, sectors and securities in any given scenario. The DLA employs a disciplined process upon which we base our decisions to rotate exposures as market conditions change. The strategy includes a strict selling discipline to limit losses during times of unfavorable market conditions.

The Disciplined Leadership Approach™ is designed to address all three factors that impact portfolio performance:

  1. Asset Class
  2. Sector Weightings and
  3. Security Selection

The DLA provides the scope required to leverage relative strength across all three of these factors. This allows Barometer Portfolio Managers to construct portfolios based on the current market situation, while having the discipline to tactically rotate exposures as market conditions change.

Absolute Return

The Barometer DLA is designed to do two things:

  1. Capture market opportunity during positive market cycles and
  2. Preserve capital during periods of market risk.


Through the use of Barometer’s risk and breadth models, portfolios have the capacity to tactically shift as market conditions evolve. This helps to ensure that they have the ability to remain relevant against the backdrop of current market conditions—not a static index—and to express both sector and asset allocations through a strict fundamental assessment at the security level.


The Barometer DLA is designed to guide managers as they make objective decisions as to how to shift portfolios based on observed market conditions and not on conjectures or forecasts. To ensure ongoing transparency, holdings and sector weights are reported weekly giving investors a clear insight into the positioning of a portfolio and the prevailing investment strategy.

A Proven Track Record

Barometer Capital Management has a proven track record of generating strong returns regardless of prevailing marketing conditions. Our unbiased approach to investment management allows us to invest with discipline, while maintaining the conviction to take defensive measures when our assessment of market conditions signals a need for change.

In addition to providing investment services directly to clients, Barometer has built a strong reputation within the Investment Advisor community as a valued partner and third-party fund manager.

We have developed an exclusive network of Advisor partners who have come to rely on us as they develop their business leveraging our unique investment approach and personal accessibility. By providing an active solution that Investment Advisors can adopt as a core allocation within their clients’ portfolios, Advisors are free to focus on client service and developing their business, unencumbered by the need to manage the asset mix of the portfolio.

Security Selection

“Your investment manager’s job is to not only seek sound investments but actively manage exposure to the market, asset classes and various industry groups.”

The most significant increases in market price often come as investors recognize that a company has made the leap from good to great. Applying proprietary quantitative analytics, Barometer researches and ranks global securities in more than 41 industry sectors. The single minded purpose is to identify companies and securities exhibiting those characteristics found in companies undergoing a positive change. Rigorous ranking criteria, used to screen for specific fundamental and technical characteristics, help us to narrow the broad universe of potential investments to a list of potent “possibles”. Continuous and thorough due diligence then help to bring the universe into even sharper focus. Finally, using our assessment of market and sector risks, we can build a portfolio which delivers on the promise of consistent absolute returns.

Portfolio Construction

“Markets are dynamic. So too are our portfolios.”

Portfolio diversification is important; however, over diversification can lead to market-like, correlated returns. As active managers, our goal is not to simply mimic an index, rather to produce absolute returns. Whether it’s the equity portfolio, balanced portfolio or the high-income portfolio (each of which may hold 40-50 positions), a portfolio that is focused provides diversification while allowing the most dynamic, best performing securities to make a difference.

Selling Strategy

“The most common investment mistakes have very little to do with what people buy, but almost everything to do with what they don’t sell.”

At Barometer, our disciplined selling strategy is a fundamental part of our investment process. In fact, it is actually a part of our buying process. As soon as we invest in a security, we immediately assign a corresponding stop/loss alert.

Here is how it works.

If the price of a security rises as we expect, we add to that position and correspondingly raise our stop/loss alert. We will never add to a position that is on a price decline.

All of our stop/loss levels are based on technical trend models that are designed to provide an indication of any break in the long-term price advance of a security. This approach removes the sell decision determination from the discretion of the portfolio manager, allowing for a very disciplined selling strategy.

In addition to our stop/loss methodology, we also engage in a daily ranking of portfolio positions by each member of the investment and research teams. This provides an objective framework for ensuring that portfolio positions make sense given what we continue to learn on a collective basis. It also ensures that our portfolio managers have accountability for the positions that they hold.