JLFMI Investment Management Service

J. Lyons Fund Management, Inc. provides discretionary management of investment accounts. That simply means that we remove for you the burden of managing your own investments and implement the entire process for you -- from the decision-making to the implementation of the investment strategy.

You can rest assured that as we provide this service, your assets are securely held by an independent trust company. We have no access to your funds whatsoever, only the ability to manage the funds. (Additionally, arrangements can be made to manage your 401(k) or other retirement plan where it exists in cases where it is still active and cannot be moved.) Allowing us to assume the responsibility of managing your investments will allow you to focus your time and energy on the other important things in your life.

JLFMI's investment objective is to outperform the market over a complete bull and bear market cycle -- and to do it with substantially less risk. To accomplish that objective, we use proprietary models to identify favorable times to invest in the market as well as the best areas in which to invest at any given time. Importantly -- and the characteristic that sets us apart from most advisors -- is that we actively and continuously monitor the level of risk in the market and will take decisive steps to protect our clients' assets when that risk gets too high. For example, on September 15, 2008, we placed our clients' assets in a 100% cash position, protecting them during one of the worst stock market declines in history.

The J. Lyons Fund Management, Inc. investment approach, combined with discipline and 40 years of investment experience, has allowed JLFMI to meet its objective, even through the harshest investment climates.


Learn more about JLFMI's Management System and Service

Investment Approach ("How do you manage your clients' money?")
Custody of Assets ("How do I know my money is safe?")
Eligibility ("Can JLFMI manage my investment account?")
Fees ("What does your management service cost?")

Investment Approach ("How do you manage your clients' money?")

The goal of JLFMI's investment apporach is simple: invest our clients' assets for the greater part of significant stock market advances -- and protect their assets during the greater part of significant declines. Conversely, the typical advice from Wall Street and the rest of the investment "establishment" is simply “buy and hold”. Unfortunately, that advice is often self-serving, designed to prevent assets from going elsewhere. Moreover, an examination of the past 10 years will clearly show how ineffectual it is. In fact, a look at the history of investing in general will only reinforce the conclusion that buying and holding eventually will lead to a disastrous conclusion. Moreover, that danger is compounded should you begin that "holding" at a high in the market, which unfortunately is when the average investor becomes most bullish.

The most important objective in investing according to Warren Buffet is not to lose money. We have to imagine that most investment professionals offering advice to clients feel the same way about their own money and at least attempt to take steps to avoid damaging losses of their own. We don't believe that individual investors should be treated any differently.

We do believe that:

  1. The greatest potential investment returns historically come from the stock market and
  2. There are times to be invested in the stock market and there are times to not be invested (e.g., 2000 - 2003 and 2007 - 2009).

As our clients have witnessed for decades, we do not believe it is inevitable to take big investment losses. In fact, we believe that the ability to avoid such large losses is the biggest key in achieving long-term investment success.

Therefore, we long ago developed two proprietary tools, a Risk Model and a Fund Selection Model, to help us take advantage of the profit potential that stock markets can offer while also protecting our clients' assets during the rough times. Specifically, these two models help us to answer the two necessary question in investing: When to be invested? and What to invest in?

The JLFMI Risk Model - When to be invested?

Central in our strategy is the proprietary J. Lyons Fund Management, Inc. Risk Model, which aids us in being on the right side of significant stock market moves. It was developed in the mid-1970's by JLFMI founder and president, John S. Lyons, and has been in use now since 1978. The Model consists of several data sets derived directly from the stock market itself which represent various measures of risk and momentum in the market. Collectively, they provide us with a reading on the overall level of risk present in the market and dictate our investment posture. When the Model is in a "Buy" mode, it is indicating that the market risk is low enough that significant investment exposure is warranted. Conversely, when the Model is in a "Sell" mode, it is a warning that the risk present in the market is high enough that our focus should be on protecting our capital, meaning little or no investment exposure.

Learn more about the JLFMI Risk Model

The JLFMI Fund Selection Model - What to invest in?

If the Risk Model indicates that it is appropriate to be invested, the next decision is what to invest in. At any given time, some areas of the market are performing well while others are doing little or nothing. Therefore, it is neither productive nor even conservative to simply diversify across all segments of the market. This type of diversification only dilutes returns during up trends while often providing inadequate protection in down trends. Our philosophy on investment selection is to concentrate on the best performing areas of the market (including the various market caps, sectors, foreign markets, commodities, etc.) Our revolutionary Fund Selection Model identifies those mutual funds and exchange traded funds that currently have the potential for the best future performance relative to other available funds.

Learn more about the JLFMI Fund Selection Model


Our success in developing and utilizing our investment techniques has depended upon objectivity, discipline and thoughtful planning. Your success in deploying your investable funds will depend upon the same factors. We are very willing to discuss our services at length with you so that you will be better prepared to make the correct decision when considering the great number of investment alternatives available to you.

For more insight into our unique investment approach and why we believe it is imperative for investors to adopt at least a variation of the approach, see our Investment Philosophy.

Custody of Assets ("How do I know my money is safe?")

J. Lyons Fund Management, Inc. never has possession of our clients' assets. We receive authorization from clients only to manage the investments within their account.

Client funds are primarily held at Millennium Trust Company in Oak Brook, IL, which serves as the custodian for the assets. At no time do we, or anyone else, have access to withdraw funds from your account, except for fees as disclosed in our Client-Advisor Agreement. The only one authorized to withdraw funds is the account owner and the only place funds can be sent is to the address of record on the account. Clients can elect to have online access to their portfolio status and Millennium furnishes quarterly statements and annual 1099 forms where applicable. All uninvested funds at Millennium enjoy the full FDIC insurance coverage as allowed by law. More information about Millennium Trust can be found here.

 

Eligibility ("Can JLFMI manage my particular investment account?")

Because of our investment approach, we feel JLFMI's management service can help almost any type of investor with almost any investment account. We do have a focus on retirement account management because 1) we have considerable experience and expertise in that area and with the types of investments typically associated with it, and 2) a great percentage of the investable assets in this country are in retirement accounts. Because the growth of retirement accounts is so essential to their owners and because so little practical investment assistance is available to existing 401(k) plan participants and IRA owners, it has long been a commitment of J Lyons Fund Management to serve these “forgotten investors”.

However, whether you are a high-net worth investor or a retirement account investor, whether you have taxable money you want to invest or an IRA, 401(k) plan or other type of retirement plan, we believe our focus on targeting growth opportunities when they exist while actively reducing risk can help provide the long-term growth that is the objective of all investors.

JLFMI does have a minimum required investment amount of $50,000. However, even if your account does not qualify for that amount, please contact us. There is such a lack of quality investment assistance available that we would still like to help you find an effective solution and we have some ideas for you.

Fees ("What does your management service cost?")

J. Lyons Fund Management, Inc. is a fee-only investment advisor. Our management fee is based on a percentage of the client's assets. We feel this is the most appropriate structure as it keeps our objectives in line with your objectives as a client -- our compensation rises only if the value of your account rises. JLFMI is independent of any affiliation with any other firm and, as such, the decisions we make are not influenced by any self-serving interests whatsoever but are solely based on the best interest of the client. Importantly as well, we receive no fees or commissions from any other entity.

Our fee structure is clear and straightforward. Our management fee is 2% annually and is billed on a quarterly basis (i.e., 0.5% per quarter based on the value of the account at quarter's end.) You will not receive any surprise, "fine print" charges. For accounts custodied at Millennium Trust, there is a quarterly administrative fee of $75. Most accounts can have their fees withdrawn directly from their account. Please contact us if you have any questions.

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December 2016 Issue

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