Broker Check

Investment Analysis

“Our proprietary Fiduciary Scoring Metric provides powerful analysis and insight into the attributes of potential investments and investment strategies.”

At Horizon, we use our Fiduciary Scoring Metric to make buy, hold and sell decisions. This sophisticated metric can factor out short-term aberrations and point to the strongest characteristics in a given asset class, using the following criteria:

  • Returns over different periods. Consistency is key. By looking at different time-frames of performance, we can see how an investment has historically performed during changing market cycles.
  • Size of investment (dollars under management). We look for investments whose asset size is large enough that they have the potential to provide stability, yet small enough that they have the potential to be managed effectively.
  • Risk/reward measures. Using key measures such as standard deviation and Sharpe Ratio, we look for investments with historically lower risk and volatility.
  • Manager tenure. We believe experience is critical. When managers have been in their roles for a longer period of time, we can see their philosophy in action.
  • Investment expenses. Costs matter. We are diligent about understanding all costs associated with the investments we select. All things being equal, we select the lower-cost option.

Buy, hold or sell?

The Fiduciary Scoring Metric assigns an overall score of 1-100 to each investment and tracks these scores monthly to determine whether to buy, hold, sell or avoid the investment. The scoring “grades” are as follows:

  • 1-33 = Red. This investment will not be used in portfolios.
  • 34-66 = Yellow. This investment will be placed on a “Watch List” to monitor.
  • 67-100 = Green. This investment will be used in our portfolios.

In addition to our scoring methodology, we use several outside sources for our research in determining individual investment purchases.

There is no assurance that the techniques and strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Past performance is not guarantee of future results. Standard deviation is a historical measure of the variability of returns relative to the average annual return. If a portfolio has a high standard deviation, its returns have been volatile. The Sharpe ratio is a risk-adjusted measure of the excess return (or Risk Premium) per unit of risk in an investment asset or a trading strategy.