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Capital Management

We strive to ensure clients’ investments are properly diversified with and active portfolio management strategy.

Our equity investment philosophy is grounded in both fundamental and quantitative research. Our equity research process begins by identifying stocks with the highest risk-adjusted returns with a market capitalization typically above $3 billion. Out of this list we conduct fundamental research that seeks to identify companies that we believe can deliver attractive future annual earnings growth, with rising return on invested capital, and positive cash flow growth.

We believe that lower risk entry points exist where expectations of future earnings growth are underestimated. Our process seeks to identify companies whose earnings growth rates are accelerating above market expectations. Through active management, we look to buy and hold stock in companies with improving fundamentals. We then sell investment in companies with declining fundamentals and growth expectations. Our goal is to select only those stocks with the highest potential for price appreciation over at least a two-year period.

Portfolios are managed according to a disciplined investment philosophy that adheres to diversification as an important principle in reducing risk. To achieve diversification, client portfolios may have 20 to 40 individual equity positions representing a range of industries and sectors.

We believe the decision to sell a stock is as important as the decision to buy one. Our stocks undergo a weekly formal review and daily informal review. All holdings are carefully monitored to compare current characteristics to those that led to the initial decision to buy.

In an attempt to minimize interest rate risk, we utilize a laddered bond investment strategy. This strategy involves building a portfolio of high-quality bonds with staggered maturities so a portion of the portfolio will mature each year. To maintain the ladder, income from currently maturing bonds is typically invested in bonds with longer maturities within the range of the bond ladder. The primary goal of a laddered bond portfolio is to achieve a total return with a lower market price and reinvestment risk than strategies that attempt to time interest rate moves.