J2 Capital Management:  Focused on delivering Tactical Risk Managed Strategies across ETF’s and Individual stocks.   Providing quantitative risk managed relative strength tactical strategies since 2007.

A long only stock strategy that seeks to buy hi quality growth stocks that are growing their earnings significantly. The manager makes use of technical analysis for buying decisions as well as profit targets and stop losses to limit draw downs. Strategy can be 0-100% equity depending on market climate.

Portfolio Manager:  John E. Benedict

Style: Tactical All-Cap Growth. (Mid Cap Growth)

Minimum Initial Investment: >$75,000

Who’s this right for:

  • Clients looking for Individual equity selection of high growth names in a concentrated portfolio.
  • Alternative to buy and hold portfolios.
  • Active risk management.
  • A Tactical Approach that can hold up to 100% cash.

RS Leaders Investment Process:

Click on the different steps to learn more.

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Access Current Market Environment

J2 Capital Management uses a combination of a proprietary algorithm to assess current market risk and dynamics along with manager discretion to determine equity levels of the portfolio.   Analysis Used:
  • Market Breadth
  • Volatility Levels
  • Technical Analysis.

Security Selection

  • Daily screening of all stocks in the NYSE and Nasdaq. Over 5,000 symbols.
  • Earnings Per Share (EPS): We seek to find companies that have at least a 2 yr. history of increasing EPS significantly on both a year on year and quarter over quarter basis. Special exceptions can be made for newer securities with less than 2 yrs of history.
  • Return On Equity (ROE): Seek to find companies with high Return on Equity.
  • Market Capitalization of greater than $250 million.
  • Average daily volume of greater than $250,000

Find Relative Strength

  • The universe is then placed in a database and then pitted against one another using a proprietary algorithm developed by J2 Capital Management to find the strongest stocks with the least volatility (Volatility Adjusted Relative Strength). Each position is weighted and ranked based on Relative Strength and Volatility.
(RS) = Relative Strength.  Assess the strength of each stock against every other stock in the list, then against the market as a whole, and finally against a risk free asset (SHY).  Only the strongest stocks with a small penalty for risk make it into the portfolio.

Portfolio Construction

  • Only stocks in the top half of the ranking are looked at for inclusion for the portfolio.
  • Manager will assess each stock’s chart and overall market regime to determine when to add to portfolio. Manager will look for stocks breaking out of bases and also stocks that are pulling back to key support areas based on supply/demand dynamics.
  • 0-40 stocks.
  • Equity range 0-100% based on market environment.
  • Position allocations based on risk parity.

Risk Management

  • Every 2 weeks the portfolio is rebalanced and reviewed.
  • Stocks will be replaced if they are ranked lower than the S&P 500.
  • If market indicator is on a “sell” stocks will be sold to cash once they start ranking below cash or hit other pre-determined price levels.

Profile Sheet:

Download the PDF file .

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