Our Investment Philosophy & Approach

We believe that investment portfolios should be well diversified and incorporate the concept of asset allocation where appropriate.  Portfolios should be allocated among the primary asset classes of equities, fixed income, and cash and equivalents in varying proportions, depending upon your unique individual needs and circumstances.  Concentrated positions in any specific security or industry group should be avoided in order to effectively manage risk and attain adequate portfolio diversification.

Additional diversification should be achieved through broad representation within each asset class as well.  The equity component should consist of an appropriate allocation to large, medium, and small cap companies, both domestic and international, and include both value and growth investment styles.  Real estate and/or commodities may also be appropriate as an inflation hedge and an additional element of diversification.  The fixed income component should be comprised of corporate and government bonds of various types and maturities, including municipal bonds where tax sensitivity is a concern.  Adequate liquidity should be provided through insured bank deposits, money market mutual funds, short-term bank certificates of deposit, and other safe investments that can easily be converted to cash with minimal risk of reduction to principal.

Although we do offer customized guidance on stock selection and individual stock portfolios, it is our sincere belief that personal financial advisors generally lack the time and resources to manage sizeable individual stock or bond portfolios as effectively as seasoned money managers and full-time money management professionals.  Given a client’s identified goals and objectives, a financial advisor’s primary role is to provide quality comprehensive guidance and advice, design and implement customized financial plans, and establish the vision and framework for a prudent investment strategy. Effective portfolio management entails periodic meetings and conference calls with companies and their managements, interviews with industry leaders and critical personnel, and travel throughout the world conducting fundamental research - essential tasks difficult for personal financial advisors to achieve on their own.  Thus, when constructing investment portfolios, we often advocate utilizing the services of experienced professional money managers - generally via privately managed accounts, mutual funds, or similar avenues.  If professional money management is not a viable alternative, the opinions of internal and external research analysts and various proprietary stock evaluation models are generally consulted and utilized when making portfolio recommendations. 

Manager selection is based on multiple criteria, including the tenure and experience of the manager, the existence of a disciplined investment methodology and approach, and consistency of performance relative to appropriate benchmark indices over 3, 5, and 10 year periods.  Although short-term performance against an appropriate benchmark index is considered, performance over the longer term is paramount. Acceptable reasons to change a core holding include management turnover, changes in a manager’s investment philosophy, style or objectives, chronic underperformance, a change in client objectives, or other valid reasons discussed with our clients and mutually agreed upon.