The All Strategy portion of a client’s portfolio follows a carefully constructed, actively managed “All-Cap Size, All Style” approach, which diversifies a client’s assets among several different strategies.
Each of these strategies is characterized by a set of quantitative variables such as:
Sales and earnings growth
Balance sheet leverage
Dividend payout ratio
The securities in each strategy are reviewed every two weeks to determine whether a company should be added or removed from our preferred buy and hold list. Once the securities are identified with a strategy, we then use behavioral finance methods to re-balance our positions to pursue maximum growth.
In contrast to All Strategy, our Equity Income strategy looks for companies that we believe will continue to generate sufficient cash to maintain or even raise their dividend payments. High dividend paying securities are found in many different industries such as pipelines, real estate investment trusts, utilities, and transportation.
At a glance, our Equity Income portfolio typically holds as many as 30 different individual securities. The primary purpose of Equity Income is to generate enough cash flow to support current outlays, and to provide price appreciation if the individual stocks held raise their dividends. In doing so, we strive to not only provide you with a stable income for daily life, but also a basis for further growth.
Similar to Equity Income, the goal of the Fixed Income portion of a client’s portfolio is to generate enough cash to support current outlays.
The difference between the two portions of a client’s portfolio is that with Fixed Income, the income generated from interest is more certain. We buy individual bonds instead of funds to provide our investors with a finite date to expect the return on their principal. We use our knowledge of prevailing yields as well as analysis of the company’s credit risk in our individual bond selection process.
Our due diligence in bond financial analysis enables us to review the accuracy of a bond’s current public credit rating, analyze its yields, and determine its target duration.