Content provided by Grant Engelbart, CFA, CLS Portfolio Manager,


I love to eat. Problem is I’m really not any good at it. I make a terrible mess, and in any kind of important setting, I ensure I order something that can be consumed with a fork. I can’t imagine trying to eat anything without utensils. Sure, I would be able to get most of the food where it needed to be, but I probably would have fewer friends afterwards.

Like eating, investing can be a sloppy mess if you don’t use the right utensils – there’s a comparison you probably haven’t read yet! Utensils, or tools, for an investor aren’t a mouse and keyboard, or even a fancy investing computer program. Some of the most important tools are the data points we use to make the markets digestible: risk, valuations, quality statistics, and so on.

Humans (myself included) are naturally a mess. We let our emotions get in the way, we don’t let go of ideas that haven’t worked, and we trust our gut because maybe it worked for us one time out of a hundred. It extends to all levels of the profession, from amateurs to the best fund managers. We all need the proper tools to keep the spaghetti off our collective laps.

How much risk are you taking? You could try guessing, but you need to measure it. Are your investments overvalued? Take a look at valuation statistics. Can the companies you own keep paying their dividends? Check the balance sheet. Seems simple enough, right? A lot of the time we maintain discipline and use our utensils, but every once in a while we order the baby back ribs and set ourselves up for disaster.

At CLS, we develop and utilize tools that are sophisticated and powerful, yet understandable and applicable for our advisors and clients. The right tools can keep everyone on track, from those of us allocating portfolios to advisors who want a glimpse of what we are eating…err… buying.

The views expressed herein are exclusively those of CLS Investments, LLC, and are not meant as investment advice and are subject to change. This information is prepared for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. You should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that statements regarding future prospects may not be realized. You should note that security values may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not a guide to future performance. Investing in any security involves certain systematic risks including, but not limited to, market risk, interest-rate risk, inflation risk, and event risk. These risks are in addition to any unsystematic risks associated with particular investment styles or strategies.