Investment Philosophy

The Power of Probabilities

While the term "discipline" is often used to describe a firm’s investment philosophy, at Bower Hill Capital Management ("BHCM"), "discipline" is not just a descriptor, it is part of our DNA. BHCM’s arsenal of dynamic strategies utilizes a systematic, rules-based approach designed to participate in financial markets during periods of rising asset prices and step away from the market when prices deteriorate. A key component of our approach utilizes mathematical probabilities to quantitatively define when it makes sense to put money to work in the market, when logic suggests to reduce financial asset exposures, and when probable outcomes demand we prudently move perhaps an entire portfolio into cash. This disciplined concept is our competitive advantage and we believe our approach is critical to wealth building.

At BHCM, we believe that investing is a marathon and not a sprint, and the most successful investment methodologies should not be measured by whether they beat a benchmark in a given year but by how they have performed over a complete investment cycle. In our view, attempting to beat a benchmark year-over-year is not a viable investment goal for investors as it is rarely, if ever, achieved. In fact, BHCM believes those investors and/or asset managers that do chase a benchmark in a given year may often layer-on excessive portfolio risk as they attempt to exceed the target. This may leave such an investment strategy especially susceptible to material drawdowns in asset prices. Instead, our firm employs a sustainable investment approach that seeks to participate in upside market trends while mitigating losses on the downside. Over time, this winning by not losing strategy has been empirically shown to positively impact portfolio values and outpace benchmark returns when measured over multiple years.

BHCM is grounded in the discipline of statistical market probabilities and a top-down, risk-mitigating investment approach; and we primarily employ ETFs to manage global asset exposures. In addition, we also use years of experience in bottoms-up fundamental analysis and a deep understanding of global market strategy to build effective individual equity portfolio strategies for investors favoring a more long-term time horizon. Here our risk-mitigating and rigorous bottoms-up approaches are combined to construct portfolios for individuals favoring longer-term equity investment in individual companies.

At BHCM, we believe combining fundamental foresight, tactical trend analysis, and a systematic identification of probable market outcomes provides the optimal investment platform for both individuals and institutions. We invite you to contact us directly to learn more about our discipline and BHCM’s investment solutions.