Fred Fern had all of his money invested in IBM in 1962. When the blue chip of blue chip stocks dropped 50 percent, the young man experienced a significant financial disappointment and realized how little he understood about investing.
Rather than discouraging Fern, the loss sparked his interest in what drives market volatility and performance.
He enrolled in an investing seminar hosted by Bill O’Neill, founder of Investors Business Daily.
“O’Neil is a technical chart kind of guy,” Fern said.
Although Fern was all set to graduate from UCLA and begin working in his father’s shoe business, he instead became a financial advisor in 1963 and launched his own firm, Churchill Management Group.
“I named the firm after Winston Churchill because John Wayne’s oldest son told me to,” said Fern. “He was a good friend.”
Today, the firm caters to 5,000 clients, maintains offices nationwide including in California and New York and manages more than $4 billion in assets.
“In addition to using Bill O’Neil’s charting philosophy, we added stocks that have a great business formula,” Fern said. “We use charts to find securities that look like they are on the rise, which are called momentum stocks.”
Eventually, the married father of three developed his own signature investment philosophy and for the eighth consecutive year, the Los Angeles resident scored a top spot on Barron's Top 1,200 Financial Advisors list.
“We not only aim to understand the fundamental factors of the market but also to focus on earnings and value,” said Fern. “Studying charts gives us perspective on picking securities and develops a cut-loss policy so that we never get smashed when the market declines.”
The secret sauce to scoring on an annual ranking of America's top financial advisors year after year isn’t as simple as acquiring the latest technology or a brand name online platform that every other financial advisor is using.
“In today's world, everybody has access to charting data on their iPad,” Fern said. “But there’s nothing like the perspective that you get from walking into a room full of charts hanging on the wall that demonstrate the market’s up and down cycles.”
Fern uses a chart room in his Los Angeles office.
“It shows you life and give us a picture of the stock market,” said Fern. That picture has yielded Churchill Management’s tactical products 10 percent to 12 percent in 2017 so far, including Premier Wealth Tactical Core Composite, for individual portfolios, and Chartwell Family Fund, a hedge fund like investment vehicle.
“Our clients are bullish, our brokers are bullish, and our prospects are bullish at the top and at the bottom, our clients are bearish, our prospects are bearish, our brokers are bearish,” he said. “When the psychology of one of those groups goes to an extreme, we go the opposite way based on the fundamental charts.”
Juliette Fairley is a business and finance journalist who has written four personal finance books and has written for major news organizations. Juliette can be reached at email@example.com.
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