Signal Asset Management offers clients a Discretionary Share Trading Program using a “Long Only” trading mandate. For clients who decide to invest in this offering a segregated share trading account in the client’s name will be opened at Sanlam Private Wealth (JSE Member). Clients who have funds available for investment from a Retirement Annuity or Living Annuity may also participate via Sanlam’s Glacier Platform using Sanlam Private Wealth (JSE Member) as stockbroker.
All clients who invest in this offering will be required to sign a discretionary trading mandate with Signal Asset Management.
Minimum amount
Alan has years of experience in technical and systematic trading while his Fundamental Consultants have decades of experience in fundamental analysis with a special focus on special situation investing. The different approaches complement each other well, covering a broad spectrum of trading techniques. Risk management is a key focus in order to mitigate drawdowns
Deep Value (small to mid-caps) plays with frequent management visits, Upside Earnings results and trading updates on value stocks etc.
A strict bottom up approach is adopted where management visits and management meetings are predominant. Key questions are asked and we stay very close to management throughout the holding of these particular equities.
The stop loss on the trade is always identified first and we do try and give a trade the benefit of the doubt when implementing. That is we position our stop loss in such a way that if we are stopped out then we are happy to acknowledge that the trade did not work out as expected.
Our Trading Plan is that when a fundamental trade presents itself and is backed up by the technical indicators then the full position is bought. Up to 15% of the portfolio size. If the fundamental trade is not backed up by the technical indicators then we would implement 5% of the trade immediately and only accumulate when either it is later backed up by the technical indicators or new evidence is sourced to back up the trade.
The Stop loss would always be the exit strategy override.
We have a strict filtering system, which means that the trades that are put on are only high conviction trades. These are not merely trades that are showing a good buy, but trades that have a very good risk: reward ratio as well. We therefore would reject trades that might have a good buy set up however their risk: reward is not good enough.
For each trade we begin by looking at the medium to long-term picture where we use our diversified indicators to identify a good trading opportunity.
We then drill down to the short term daily indicators to actually time the entry for the trade.
The stop loss on the trade is always identified first and we do try and give a trade the benefit of the doubt when implementing. That is we position our stop loss in such a way that if we are stopped out then we are happy to acknowledge that the trade did not work out as expected.
The next issue is we look at two (2) profit-taking areas for the trade. That is two points where we are satisfied that there could well be resistance for the trade to go higher.
The normal time frame for the winning trades will be anything from a week to 3 months and the losing trades anything from a day to a week.
Our Trading Plan for each trade consists of the following criteria : a) Position sizing – minimum of 5% , maximum of 15% portfolio size per each individual trade b) Risk of about 10% * and c) Profit potential of around 20 %* of each trade.
*these are approximate percentages based on our track record and years of tracking share performance. Volatility of each individual share also plays a part.
An example of this would be say a portfolio size of R1 000 000, a trade would typically be exposure of R 100 000 (10%), risk of R 10 000(1%) and profit potential of R20 000(2%).
