Modern portfolio theory, which seeks to maximize expected return and
minimize risk with a diversified portfolio, still looms large in the
financial advisor universe.
But Peter Skoufis has taken a different approach in building his
financial advisory business. He selects stocks using CAN SLIM
principles and has the ability to be fully invested or 100% in cash when
the market is heading sharply south.
"Unless you have a strategy you're implementing, most folks do take a
passive approach," Skoufis, chief investment officer at Skoufis Capital
Management, told IBD. "I think active investing is beneficial in any
market. Even when the markets are doing well, active investing can get you
into the best performers if you have a concentrated basket of the
Skoufis recently moved his business to Chicago from Milwaukee to broaden
his client base and educate investors who may not be familiar with the
benefits of CAN SLIM, the investment system developed by Investor's
Business Daily founder and Chairman William O'Neil.
Best Stocks To Invest In
"I love working with CAN SLIM because it puts my clients in the
best-performing stocks and protects them during market downturns," Skoufis
said. "Using CAN SLIM is a way to differentiate my business from the vast
investment world and provides a unique and differentiated approach to
investors looking for another way to handle a very tumultuous investment
For instance, he began moving into cash in December as he locked in
gains and cut losses amid the market downturn. He followed his 7%
loss-cutting rule and was out of the market for much of the stock market
correction. And his clients aren't complaining.
Skoufis gained attention as a UBS stockbroker in 2008 when the Nasdaq
composite and S&P 500 sank a respective 41% and 38%. Using CAN SLIM
helped him avoid the crash, and he instead wrapped up the year with a 2%
return. In 2013, he snared a 59% return, outperforming the S&P 500 and
Nasdaq's 30% and 38% respective gains.
"I remember walking into my office at UBS in 2008, and everybody was
panicking," he recalled. "Passive (investing) becomes very difficult during
those times, and you really have to have a longer-term approach. I think
itâ€™s really important for folks that are getting closer to retirement to
consider having some sort of assets in active, because they may not have 10
or 15 years to hold through the next longer-term bear cycle down."
He launched his portfolio management career in 2005 at A.G. Edwards in
Milwaukee and has been CAN SLIM certified since 2007. After trading on his
own for a few years, he approached the investment firm and told the hiring
manager he wanted to build a business around Investor's Business Daily.
After moving to UBS and running the strategy there for about three years,
he decided to start his own niche financial advisory business in April 2011.
Cuts Stock Losses
Skoufis usually holds six to eight stock positions and prefers to take
profits at 15% to 20% and wait for a new basing pattern to form. He cuts
losses at 7% to protect against major broad market declines. Given the
current volatility, he says, growth investors should be out of the market.
They need to protect both emotional capital and their investment accounts,
"Investors may need to be prepared for a longer-term correction or bear
market," he said. "With the typical bear market lasting six to eight months
on average, now is a good time for investors to position themselves for the
next uptrend that will eventually come. The CAN SLIM strategy will be able
to flag that turning point and offer astute growth investors a fresh new
group of leading stocks with strong fundamentals and coming out of proper
technical basing patterns."
Skoufis educates clients on CAN SLIM investing through his website (www.skoufiscapital.com)
and other materials.