Active investment management

Growth investing
Individual stock approachutilized for potential to increase profits:

Investing for Growth

Growth investing is an investment strategy that seeks stocks (equities) with superior earnings growth prospects. Such stocks tend to have low dividend yields, less downside protection, higher volatility, and higher sensitivity to changes in interest rates than low growth shares.

The majority of Tango Capital Management’s client portfolios are invested to achieve growth of capital. Tango’s primary goal is to outperform the S&P 500 Index over any continuous 12-month period. No guarantee can be made that this objective will be met. Investing involves risk and there is always the possibility investors will lose money.

With that said, our systems are designed to limit possible losses by moving quickly to close positions if the market moves against them. We also recognize that the market moves through different stages over a full cycle of bull and bear. There will be times when the portfolio will remain relatively flat or decline in value. Our goal at all times is to be positioned in investments that our analysis identifies as “bullish.” At times, money markets or inverse funds may dominate that designation.

Tango’s investment approach does not wait for the market to realize the value of a particular equity or position. We do not attempt to predict or set targets for our investments. We look for trends in the market that create opportunities to make money every day regardless of whether the market is moving up or down. While past performance should never be considered a guarantee of future results, our track record clearly shows the benefits of this approach, particularly over the bear markets of 2000-2003, and 2007-2008.

Financial markets and the individual positions within our client portfolios are monitored daily with the objective of identifying:

  • Which sectors of the market are outperforming in the current market conditions.
  • Which individual stocks within the best performing sectors are top performers and if they are exhibiting a bullish trend – these become our “buy” targets.
  • Whether stocks held within our portfolios continue to exhibit a bullish trend. Once a stock moves outside Tango’s parameters for bullish, it is sold.

Our goal is to hold stocks that are increasing in value and exhibiting a bullish trend. There may be times when a stock experiences losses or periods of minimal gains. As long as it continues to meet Tango’s “bullish” standard, it will be held waiting for upward momentum to resume. Our guiding rule is to "let winners run and sell losers quickly."

Because Tango utilizes trend-following decision models, we will never sell a stock at its high or purchase at the bottom. We wait for the market to confirm an investment’s direction. There will be periods of high market risk, however, when we may choose to use hedging or leveraged inverse funds to reduce the risk of an equity position that we are not ready to sell or may have reasons to hold a little longer. This allows losses in a position to be offset by gains from the hedge or inverse fund.

Investment considerations

Tax efficiency

Tango strives for tax efficiency in its investment positions. Ideally, positions are held at least one year to qualify for capital gains treatment. However, if a position no longer meets our “bullish” requirement, it will be sold. A taxable gain is always preferable to no gain or a loss.

Fee-only compensation

As a fee-only advisor, Tango does not receive trading commissions or any incentive to purchase one investment over another. Our interests are directly aligned with that of the client - to increase the value of their portfolio.

Best execution

Best execution practices allow us to minimize transaction costs when purchasing and selling stocks for a portfolio. The savings from a properly executed transactions have the potential to more than offset Tango's management fee.

Converting an account to Tango management

When clients convert existing accounts to Tango's management, we evaluate existing positions in the account as to whether or not they meet portfolio criteria, anticipated dividends, tax implications of liquidating the position, timing considerations to optimize the value of the position and the client's reason for holding the position. Special situation strategies may be used to minimize taxes or losses when assuming management of existing accounts where heritage investments may pose issues.