– Jeff Meissner

When we describe the process we use to run our Active Strategies we often compare it to the Ohio State football team. If you’re from Michigan, consider inserting your team name in place of OSU while you read.

The most time consuming aspect of our process is scouring through over 10,000 funds to decide upon the 100 that we feel are worthy of being on our bench. The same is true at Ohio State. Scouts have to travel the entire country in order to look for the best high school football players. The coaching staff has to meet with the families, watch hours of games, and put the prospect through drills so they can narrow down the players worthy of scholarships. To us, that is the most difficult part at both Ohio State and Balanced Asset Management.

We want to make sure our bench has a well diversified group of investments on it. We always have at least one fund from each investment asset class on our bench and from many asset classes we have up to five funds. Ohio State does the same. They don’t have 100 quarterbacks on the team. They always have a good mix of players. Quarterbacks, running backs, receivers etc. They even look to diversify within each position. They have a swift halfback and another that may be a stronger more punishing runner. We also diversify within asset classes. If we have two funds on our bench that both buy health care stocks, one might be aggressive and the other a bit more defensive in nature.

Once we both have our teams put together of about 100 funds or 100 young athletes, the job becomes easier. The coaches are able to watch the players on a daily basis and over time it is usually a pretty easy decision on who gets to play on game day. Because they are watching closely every day, week and month. The same as we do with the funds on our bench. We get to know what makes each of the funds on our bench go up and down in value because we are watching closely. If a player or a fund starts to under-perform we both have backups ready to go in the game that we know and trust. It’s good to have a deep bench when you need it.