Your QuickStart provides key information that helps determine how we invest for you. It leads to a personalized investment strategy in which we recommend a mix of stocks, fixed income securities and money market assets to help achieve your goals.
What Do We Look For In An Investment?
The guiding principle in how we invest is that our clients must receive a return over the long run that rewards them for the risk they take when investing.
Market prices don’t always reflect a rational estimate of value. Emotional investors can carry prices to extremes. Optimism can lead to prices that are too high, while pessimism can lead to prices that are too low.
It’s not just individual investors who cause these price swings. Professional investment managers are emotional, too. They fear that they will be fired if they don’t keep up with the market averages. This can make them focus on unpredictable short-term factors. That’s not a winning strategy.
We like to take advantage of irrational prices. If the stock market value of a business we own is too high, we’ll sell. When a business we like is trading at a bargain price, we’ll buy.
But What Do We Want to Own?
When investing in bonds, you are lending money to a borrower. You should be paid for taking credit risk and the risk that inflation will erode your purchasing power.
When buying stocks, you are buying ownership interests in real companies. We want to understand what these businesses do, how profitable they are likely to be and how skilled their management teams are. We also want to pay prices for them that are reasonable.
All of this means we’re very selective. Few companies meet our criteria. Though Wall Street promoters never tire of offering new concepts, we do our own research and stick to what makes sense to us.
It’s Smart Investing
Our selective approach means that we will be out of step with the market at times. That’s OK with us. It’s more important that clients receive a return over the long run that rewards them for the risk they take when investing.
You can read our Insights blog for financial planning tips, investment analysis and news about our company.