This page is dedicated to recent Customer Relations questions and responses.  Custodio Asset Management is proud of its outstanding response time.  Interested parties are encouraged to post their questions in the box at the bottom of the page..

11-10-08

 ”What can CAM do for me that a bigger investment house won’t?” 

One of the highlights of being with CAM is that your portfolio will not be exposed to the market’s volatility 100% of the time.  The main flaw in a buy-and-hold strategy is that your money is in the market all the time.  This means that if the market is down, so will your investments be down and however long it takes to recover from the losses will be in direct proportion to your own recovery.   At CAM, you know from our historical performance charts that we do not subscribe to that strategy.  Investors have hired us to provide value for their investment dollars and our returns are proof positive of that value. 

“Is now a bad time to invest because of the market conditions?“

If you were going it alone as an amateur, yes, it’s a horrible time to invest.  If your money is with CAM, it does not matter that the market is down.  This month has been a particularly brutal roller coaster, yet we’ve maintained our +11.188% YTD returns.  We have a proprietary strategy for the market trends.  This strategy enables us to protect your money from the dips and grow it over the long term.  Wealth management is a full-time job, and if you want to place your assets in a fluctuating market, you better have a sustainable strategy behind you and lots of time to see it through.  Alternatively, let us do the work for you as we have paved this path three years ago!

“Why not just place my money in a Certificate of Deposit (CD)?”

With a CD, you will get a tiny percentage of growth, and you won’t have access to your money without penalties.  Then, after it matures the interest is reset to a much lower rate!

Investing with CAM is like having a savings account with jaw-dropping interest rates.  You can put money into your account or take it out at any time with no penalties and no upfront fees.  Need to take a loan from yourself?  Pull the money out of your CAM account and return it when you’re ready.  That’s something you will not find with a CD.

If you have a 403(b) or recently left your company with a 401(k) plan that has taken a large hit in this market chaos, we may be able to help.  We’re not going to gamble with your money, and our numbers are proof positive that we create consistent growth even when the odds seem stacked.

When you feel betrayed, it is difficult to place your money in someone else’s hands.  Check our record for performance and our history of transparency.  With CAM, you always know where your money is and how you are doing. 

“If I invest with CAM, am I gambling in essence?“

Ask a professional poker player if he’s gambling, and he will, most likely, say no.  It’s a game of skill with variables in it.  To play successfully, one must constantly calculate percentages, see what the other players are doing, and make informed decisions with the money on the table.  Gamblers dedicate their lives to studying the mathematics and psychology specific to playing poker.  They do not throw their money out carelessly.  The best poker players slowly grind their way to the top by making safe decisions.

Imagine sitting down with your friends for a game, but one of the winners of the World Series of Poker sits in your place and plays cards for you.  You would clean up.  That’s what investing with CAM is like.  We’ve dedicated our lives to obtaining all of the skills necessary to succeed in the market.  The difference between investing and poker is that we can see everyone’s cards and we are transparent about our strategy so you are never in the dark.  With CAM, you can be sure that your money is in the hands of professional managers with a proven track record.

Blue Point Financial Alliance Retains CAM

Custodio Asset Management (CAM) CEO, Ace Custodio, announced today a commitment from Blue Point Financial Alliance to utilize CAM as an appointed benefits provider and investment adviser for all Blue Point Financial employees, the membership database and prospects.  CAM looks forward to continuing diligent growth, full transparency and the company’s success-driven strategy to all of Blue Point Financial Alliance’s employees and clients.

After three years beginning in October 2005, CAM’s +151% portfolio gain has garnered much institutional and individual interest that is both regional and national in nature.  Blue Point Financial Alliance typifies the mounting enthusiasm for the CAM record of success.

Info@Camtrading.com

09-22-08:  What is short selling?  I heard the Feds imposed a ban on short selling a few stocks.  Will this affect the CAM strategy with inverse funds?  Can CAM only buy and hold the funds now until the ban is lifted?”

Short selling (or Shorting) is a fairly sophisticated strategy that is very popular with institutional and margin traders worldwide.   For simplicity, when a stock is sold short, there is a three-party involvement in the transaction.  For example, Bill wants to short 100 shares of Microsoft stock at 40 dollars.  The broker will credit Bill’s account for $4,000.  The broker then borrows 100 shares of Microsoft stock from Mary, who is a shareholder of the stock.  Mary knows nothing of the transaction.  All Mary sees is her Microsoft stock fluctuating in value.  So, if Microsoft shares plunge to 30 dollars per share and Bill buys back the shares for Mary (known as Buy-to-cover), Bill keeps the difference between the credit value and the debit expense for the transaction.  Bill’s profit would be 10 dollars per share or $1000.   Mary would experience a loss resulting from the new market value of Microsoft stock.  If the stock rises in value, Bill could be forced by the broker to cover his positions resulting in a loss for Bill and a gain for Mary.  The broker receives a commission regardless of profit or loss for either Bill or Mary.

The short selling rule imposed by the Feds has no effect on CAM’s performance using Rydex Inverse funds.  The inverse funds are designed to track the major market indexes and not individual stocks.  When the markets drop and CAM happens to be in the inverse funds, the value of CAM assets under management will rise.  Conversely, if the markets rise, and position is in the inverse funds, the value of CAM assets under management will drop. 

There are fundamental effects of the ban to short sell and the scope of the issue encompasses far reaching economic consequences.  When the ban is lifted, there will be a sharp rise in activity to short the number of stocks on the list.  The markets will surely move, and CAM’s trading criteria will be positioned to take advantage of the fluctuations.

09-19-08:  How have recent failures and turmoil on Wall Street affected CAM?

While large financials and world markets have been in turmoil, in many ways CAM has benefited from the turbulence.  Many private and public investment advisers have recommended diversity as a safeguard to protect portfolios.  As a result, new institutional and individual investors have shown interest in firms that offer a high degree of personal service, a transparent investment platform, a sound proprietary strategy and a proven record of success.

Since CAM commenced operation in October 2005, the CAM portfolio has increased 150%.  Individuals and institutions are rightfully impressed with this third party verified growth.

At CAM, investment strategy is not motivated by commissions.  Company earnings are derived from asset management.  The more successful the client’s portfolio, the more the company earns.  At CAM, successful growth remains the name of the game.  

When I read various advice columns, they seem to suggest that if you “time the market” you end up worse than if you had stayed in and rode it out.  These articles have charts that indicate that if you are out of the market for the five worst days and out for the five best days, you are worse off.  What does CAM say to that theory?

In the past three years, the market’s rate of return has been -5.894%.  The annual return averages -1.96%.  In 2008, the market has reverted to Mid-1999 levels. 

Over the long haul, the buy and hold strategy only works if the individual is contributing to the portfolio.  Basically, your current earnings have had to work to stave off the deterioration of your portfolio. 

Look closely at some of the best hedge fund managers.  Jim Simons managed to return 35% annually for the past 15 years.  Granted the minimum investment is 20 million dollars, but his success dispels the strategy employed by big investment houses.

At CAM, our three year growth is 150%, or an annualized average of 38% for the last three years.  With our proprietary and transparent investment strategy, our clients always know right where they stand and where their money is.   CAM does not make commissions on the transactions.  CAM’s income is directly connected to the success of our clients.

 Hi, Could you explain the following link? www.oag.state.md.us/Securities/Actions/2007/CustodioAsset_OSC_SummPPnmt_12_07.pdf

Thanks,
John

Dear John,

Thank you for your interest in Custodio Asset Management, LLC.  In response to your web log query regarding File No. IA#2007-2674, Docket No. 2007-0628, the Order to Show Cause was issued by the State of Maryland because Custodio Asset Management’s application for registration lacked Form ADV Part II, which is more commonly known as Disclosures or Firm Brochures. 

The form was immediately filed, completing the registration application in the State of Maryland.  The Show Cause Order was thus satisfied. 

Custodio Asset Management’s registration was certified on June 12, 2008.  The company’s Maryland and SEC CRD Number is 144223.

We hope this completely answers your question.  If you require further information, please contact CAM CEO, Mr. Ace Custodio at Ace.Custodio@camtrading.com.

Again thank you for your interest in Custodio Asset Management.  We look forward to hearing from you.