Investment Management Process

Most of our tactical investment portfolio decisions are made with a 12-24 month time horizon. We are constantly evaluating the overall economic and securities market environment within a framework that assumes when the Federal Reserve is providing adequate money and credit to the economy, the stock and bond markets tend to perform well, and that they become risky when credit is restrained. We also employ sophisticated stock and bond market valuation models which help us make judgments as to when the markets are undervalued or overvalued, given the economic environment we foresee. We adjust our stock, bond, and money market exposures to fit the appreciation potential and risk we anticipate.

We follow a “Growth At A Reasonable Price” discipline, with our goal being to earn returns that exceed relevant benchmarks by at least by two percentage points over market cycles. Using this discipline and by investing in shares of small-cap, mid-cap, and large-cap companies, both domestic and international, we have been able to help our clients reach their investment goals. We focus on companies possessing above market growth and profitability characteristics while never forgetting the Reasonable Price piece of “Growth At A Reasonable Price.” Every stock followed by our firm has a fundamentally-based price target that helps prevent us from paying too much for an “exciting” growth story, or from holding on to an outperforming stock once everyone else has discovered it and pushed its price to unrealistic levels. Through careful investment portfolio construction, with keen emphasis on risk control, we are able to emphasize economic sectors we believe will produce the best potential returns while remaining broadly diversified.

Unlike many other firms, bond investment is not an afterthought. We have decades of experience successfully managing tax exempt, U.S. Treasury, and corporate bonds for both income and capital appreciation. We accomplish this by adjusting the coupon and maturity characteristics of the investment-grade bonds we own in anticipation of future interest rate trends and by emphasizing sectors we consider undervalued.

For our taxable clients, we always are conscious that after-tax returns are more important than pre-tax returns. Consequently, we minimize taxes by targeting long-term capital gains rather than short-term gains, by harvesting losses to offset gains, and by emphasizing tax-exempt income in the bond sectors of our taxable accounts.