Types of Clients
Hedonova Advisors offers portfolio management and advisory services to individuals,
private funds and pools (“Funds”), trusts, estates, endowments, foundations,
charitable organizations, retirement plans, and business entities.
Hedonova Advisors will not provide investment advisory services to a state or local
government as defined under SEC Rule 206(4)-5, commonly referred to as the Pay-
to-Play rule. Minimum account size for managed account programs will vary and may
be negotiable at the discretion of the third-party manager and are outlined in their Form
ADV Part 2. Adviser-managed accounts have a $10,000 required minimum account
balance. Hedonova Advisors LLC reserves the right to waive the required minimum
account balance. Hedonova Advisors LLC also reserves the right to request additional
funds or securities be deposited whenever the asset value of the account falls below
the $10,000 minimum balance.
Methods of Analysis, Investment Strategies, and
Risk of Loss
General Risk
The performance of the Company’s operations can be influenced by the unforeseeable
economic, market, social and political circumstances that are beyond its control,
potentially leading to unfavorable effects on its financial outcomes. Similar to other
businesses, the Company is susceptible to the impact of fluctuations in economic,
market, social, and political conditions, both domestically and internationally, as well
as government regulations. Factors such as inflation, recession, unemployment,
fluctuations in interest rates, short-term money supply, terrorism and various other
elements beyond the Company’s influence may negatively impact its capacity to
generate returns for investors.
Clients need to remember that past performance is no guarantee of future results. All
investments in securities carry some level of risk. A client can lose some or all of the
money invested, including the principal amount invested, as the securities can
increase or decrease in value. Dividend or interest payments can also fluctuate, or
stop completely, as market conditions change. Clients should consider the investment
objectives, risks, charges, and expenses of an investment before investing.
Regardless of the method used to make recommendations, investment products are
subject to various market, interest rate, currency, regulatory, economic, political, and
business risks and the purchase or sale of any investment products will not always
result in a profitable performance. If the primary strategy involves frequent trading, this
can affect the investment performance, particularly through increased brokerage and
other transaction costs and taxes. Clients should consider how each investment fits
into their overall investment program. Before an investment is made, the investment
product’s prospectus or shareholder reports should be reviewed by the client to learn
about the investment strategy and potential risks. Investments with higher rates of
return take risks that can be beyond the client’s comfort level and are inconsistent with
financial goals. While past performance does not necessarily predict future returns, it
can tell the client how volatile (or stable) investment has been over a period of time.
Generally, the more volatile an investment, the higher the investment risk. When
evaluating the volatility of an investment, the client should also consider the time
horizon of the investment to align with financial goals. Hedonova Advisors does not
guarantee the future performance of the investment products, strategies, or
recommendations described in this Brochure.
Hedonova Advisors primarily uses fundamental, technical, and charting methods to
analyze investments it recommends to clients. The fundamental analysis makes use
of economic and financial information in making investment decisions. The terms
technical and charting analysis are generally used synonymously, therefore for the
purposes of this document, we will use the term “technical analysis”. Technical analysis
uses charts, graphs and other tools to evaluate historical factors related to investment
instruments, past price movements, as well as the market itself.
Hedonova Advisors cannot guarantee the analysis methods used will yield a return. In
fact, a loss of principal is always a risk and investing in securities involves a risk of loss
that the client should be prepared to bear. The client should understand that
investment decisions made for their account by Hedonova Advisors are subject to
various market, currency, economic, political, and business risks. The investment
recommendations made for the client will not always be profitable nor can Hedonova
guarantee any level of performance.
A description of several of the principal risks associated with the strategies, products,
and methodology that client investment portfolios face, and that investors must be
prepared to bear are as follows:
Fundamental Analysis Risk
Fundamental analysis, when used in isolation, has a number of risks as described as
follows:
• An infinite number of factors can affect the earnings of a company, and its stock price,
over time. These include but are not limited to, economic, regulatory, political, and
social factors, in addition to the various company statistics.
• The data used may be out of date.
• Appropriate weightings to the factors may vary.
• Analyst competency and knowledge may vary.
• Acts of God, environmental factors, including accidents, legal issues such as product
defects, etc., may occur, which are outside of Hedonova’s control and risk mitigation
techniques.
Technical Analysis risk
Charting and technical analysis are often used interchangeably.
• Technical analysis is derived from the study of market participant behavior and its
efficacy is a matter of controversy.
• Methods vary greatly and can be highly subjective; different technical analysts can
sometimes make contradictory predictions from the same data.
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