Why Red Haven?
Get the edge
Red Haven Advisors strives to give its clients an edge. Personalized services, unique perspectives, and unabashed candor simplifies the investment process and enables clients to make informed investment decisions.
We are value investors at our core. By analogy, we look for opportunities to buy dollar bills for 50 cents. We conduct our own independent research and use it to develop profitable investment strategies. Since we are a fee-only investment advisor, our clients know that the services they are receiving are never incentivized by product sales commissions.
What makes Red Haven different?
Seeing the “big picture” and translating it into investable themes makes Red Haven truly unique.
Do you own mutual funds or exchange traded funds (ETFs)? If so, do you know what stocks and bonds are in those funds? Many investors only know the fund name or description. Typically, these funds have descriptions containing phrases like “Large-Cap Growth”, “Emerging Markets”, “20XX Target Date Retirement”, etc. Unfortunately, those simple phrases do not always describe the complexity of the fund.
Red Haven Advisors carefully analyzes every investment it makes. Our research includes both bottom-up analyses of individual companies and big-picture macro analyses. If we invest in an ETF, then we are familiar with the stocks and bonds inside the ETF.
The Red Haven Difference by Example
The difference between our investment process and the conventional investment process is best demonstrated by a hypothetical example. By many measures, the following hypothetical example parallels today.
The date was January 1, 2000. According to most valuation metrics, stocks were extraordinarily expensive. The “dot com bubble” reached its peak in March, then the stock market indices began a long precipitous decline. However, conventional investment advice reflexively prescribed a diversified mix of stocks and bonds in accordance with the client’s age and risk tolerance. Valuation, a key driver of future returns, was largely ignored.
Seeing the big picture would have revealed a much different investment landscape. Broadly overpriced markets minimized long-term future returns. Diversification alone offered little protection. Risk management would have involved reducing exposure to the stock market, or maintaining exposure, but doing so with a clear understanding of the risks.
Savvy investment advisors recognize that opportunities emerge once investor euphoria fades. Further, the big picture tells us that governments and central banks play active roles within asset markets. So, what value-oriented investment opportunities arose following the bursting of the dot com bubble?
One opportunity was simple - buy stock in healthy undervalued “old economy” companies that fed into the construction industry. Governments and central banks predictably intervened with fiscal policy and monetary policy that directly benefited those companies.
Maybe it’s just coincidence that Warren Buffett acquired Acme Brick, Shaw Industries (carpet), Benjamin Moore Paint, and Johns Manville (insulation) the same year the dot com bubble burst (2000). Or, maybe it pays to see the big picture.