Mike Jones, managing director, investment services division of Argent Advisors, Inc. in Ruston, Louisiana, holds a bachelor's degree in social studies education, a master of divinity and became a stockbroker right out of seminary. Over the next 10 years he worked as a retail broker with firms such as Edward Jones, Paine Webber and Prudential Bache before moving to the money manager side of life, where he has been for the last 13 years.
Could you describe your trading system and how you implement it?
I use a statistical ranking/momentum driven system to trade primarily mutual funds with some ETFs and individual securities. My main tools are a Bridge workstation, which is a Reuters' product, and Monocle charting software.
Has this always been your focus?
When I started managing assets in 1994, I was using a timing service to move in and out of bond funds. Success in this area led me to branch out into equity funds in 1996 and then to develop other models as the years unfolded.
What do you see as areas of opportunity for active money managers?
I think that the person who can build an active income/growth strategy is going to be able to gather more and more assets. Most of the managers I know have built their careers investing and trading for growth. Now the baby boomers are getting older and people are retiring. They don't want just growth. They need cash flow. They're saying, "send me a monthly check."
Our task is to create models that will do that, but not by attempting to achieve growth and then taking some of your growth as your income. That's too risky of a retirement strategy. Mess up for a year or two and you are cannibalizing your retirement. We need to build real income/growth models.
What words of wisdom would you offer other active managers?
As the years have passed, it has become very obvious to me that integrating dynamic models is the key. I have seven models that I run. Five are risk adjusted/momentum driven. One is very fundamentally driven. One is a reversion to the mean program. Being capable of blending allocations to the various models and consequently smoothing out the volatility and returns is the sell. Markets run up, run down, or mark time trading back and forth. That is it. And NO ONE knows the future, blending dynamic models which can address all market's cycles but won't bet the farm on any one is how to build a money management business that can allow a product/advisor to stack assets vertically in various models and enjoy the financial leverage that this industry affords.
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