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San Francisco, CA, June 09, 2025 — R4A, an innovative investment platform, is redefining portfolio construction by abandoning outdated industry norms in favor of a rigorously engineered, fundamentally-based, goal-aligned, and market-aware approach. At the heart of R4A’s methodology are two foundational pillars that reshape how investment success is pursued: absolute alignment to client-specific objectives and the intelligent use of market-derived expectations instead of flawed discretionary forecasting.
Breaking Free from the 60/40 Legacy
For decades, the industry has defaulted to building portfolios around risk “buckets” – or the treacherous conservative, moderate, aggressive defined by volatility instead of investment— and prepackaged allocations, most notably, the 60/40 stock/bond mix. While once seen as a prudent balance between growth and stability, this model has not only lost its relevance, but it has also been revealed as structurally flawed and risky.
The 60/40 framework relies on two major fallacies. First, it assumes erroneously that volatility alone is an adequate proxy for investor risk, neglecting actual investment objectives and fundamental value. Second, it fails to adapt to current market conditions, particularly when the fixed income component no longer delivers reliable returns due to inflationary pressures and, more importantly, the end of the historical secular bond market rally.
“Relying on the same static mix in a world of rapidly shifting market dynamics is not just outdated—it’s negligent, and dangerous,” said Simon Nocera, Managing Partner at Lumen Global Investments. “Investors deserve portfolios built with intentionality, reflecting both goals and market opportunities, not arbitrary formulas leading to cookie-cutter, one-size-fits-all formulas,” said Simon.
R4A flips this model on its head. Every investment solution begins with a clearly defined objective—whether that’s income generation, capital preservation, or aggressive growth. Portfolios are then constructed to directly align with those goals, “materially increasing the probability of successful outcomes and performance, this by construction alone,” Simon stated.
Why Forecasting Fails—and What Works Instead
While most firms still lean heavily on forecasting—betting on where markets, interest rates, or inflation might go, or relying on history, i.e., the rearview mirror, R4A avoids this speculative exercise and its constant pitfalls entirely. Decades of academic and market data make the case clear: the vast majority of active managers (or 98% according to S&P Global*) fail to outperform their benchmarks, year after year.
The implication is profound. If markets are right 98% of the time, they are wrong just 2% of the time. And with today’s instantaneous global information flows in the palm of one’s hand at zero marginal communication cost, prices instantly incorporate all available knowledge. In effect, the market itself has become the most reliable and neutral aggregator of information—the very definition of efficiency.
R4A treats prices as the most truthful investment signals. Rather than chasing unreliable forecasts, an expensive exercise of overconfidence, R4A instead extracts forward-looking return expectations directly from the market prices themselves—unbiased, timely, and reflective of the collective wisdom of the entire investing public.
The Lumen Global Value Com: Technology That Reads the Market
R4A’s edge is made possible by its proprietary Lumen Global Value Com, a cutting-edge algorithm that reverse-engineers implied expected returns from current market prices. Unlike conventional models that rely on historical returns or discretionary views, the Com offers three crucial advantages:
(1) Unbiased – It is completely free of human subjectivity or macroeconomic guessing.
(2) Forward-Looking – It derives expectations from present-day prices, not backward-looking assumptions or rearview mirror.
(3) Universal – It works across all asset types, enabling true apples-to-apples comparisons with one single ranking metric across stocks, bonds, commodities, ETFs, factors, and more.
With these expected returns in hand, R4A deploys its proprietary portfolio optimizer, a sophisticated and customized extension of the Nobel Prize-winning Black-Litterman framework. Unlike traditional optimizers that rely on static inputs and generic assumptions, R4A’s system integrates real-time market valuations and current correlations to generate portfolios that are not only theoretically optimal but demonstrably high performing.
“This is next-generation asset allocation,” said Simon. “We’ve moved beyond optimization as a theoretical exercise. Our platform uses real data, in real time, to build solutions that reflect both the investor’s objective and the current reality and granular opportunities of modern global capital markets,” according to Simon.
Better Portfolios, Built for Outcomes
The result is a suite of investment solutions that are customized, diversified, and designed for high-probability success. Clients receive portfolios that:
– Align directly with their personal investment objectives
– Avoid outdated heuristics and arbitrary allocations
– Reflect current global market conditions at granular levels
– Leverage the power of market efficiency, rather than fight it
– Continuously adapt and deliver digitally, at real-time speed
R4A’s edge stems from a unique combination: a semi-ive approach that “listens” to the market for forward guidance and valuation signals, paired with a rigorous, semi-active portfolio construction and optimization process. While this second step is often overlooked by traditional managers, it is critical to achieving superior outcomes. The combination of disciplined market interpretation and robust, objective-driven optimization represents a powerful formula designed to consistent, high-quality investment results.
With R4A, investors are no longer constrained by legacy tools and practices that no longer work in a world transformed by data and connectivity. Instead, they gain access to investment solutions that are engineered from the ground up for performance, purpose, and precision.
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