Our Fundamental Approach to Investing
Our fundamental approach to investing brings together the time-tested
benefits of investment selection and asset allocation. Investment
selection is primarily used to provide above-average growth potential.
Asset allocation provides diversification to improve risk-adjusted
returns.
- Investment Selection: Within each portfolio’s
asset allocation objectives, we seek stocks, bonds and other instruments
trading below our fair value or intrinsic value estimates. We
monitor the day-to-day market prices and buy investments for our
clients trading at discounts to their intrinsic values.
- Fair value estimates: Our proprietary
financial models are used to calculate fair value estimates. Fair
value, also known as intrinsic value, is based on a series of
assumptions about the expected growth rate of an investment. For
stocks, fair value estimates are heavily influenced by the expected
financial success of a company as it copes with external risk
factors such as interest rates, taxes, inflation and government
regulation.
- The decision to buy and hold: By buying
and holding investments trading below our fair value estimates,
our goal is to reduce investment risks while increasing long-term
returns.
- The decision to sell: By selling investments
trading above our fair market or intrinsic value estimates, our
goal is to reduce investment risks while increasing long-term
returns.
- Asset Allocation: To more effectively
manage market risks and increase expected returns, portfolios
are allocated, monitored and managed across different security
types, markets and industries.
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