Investment Analysis
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Our team’s knowledge and experience gives us the ability to analyze each investment in our client’s accounts for quality and appropriateness. It is our belief that investors can limit risk taken by selecting securities based on the fundamental quality and investment opportunity of the underlying companies, and build a diversified portfolio of these investments.
“The difference between investment alternatives is the degree of assurance that you will receive the anticipated return on your capital and the ultimate return of your capital.” Our internal investment analysis attempts to manage the risk of any particular investment while improving the after-tax return on the overall portfolio. We do this by utilizing many different investment sources and databases along with Wall Street analysis and rating agency guidelines to choose a universe of acceptable investments. Income producing investments are selected primarily for safety. Here, entities give varying degrees of assurance that you will receive the agreed to return on, and return of your investment. We normally choose investment grade bonds and guaranteed deposits because we feel the assets devoted to producing income, or hedging your risk capital, should minimize the principal risk of your capital. We analyze equity investments with the belief that you should earn a higher long-term rate of return on this portion of your portfolio. We manage the risk taken by analyzing an investment’s historical track record, its current financial condition, and the anticipated return expectation. If an investment flunks any of these initial screens we exclude it from further consideration. Once we determine the appropriate use of equities (risk capital) in a portfolio, we begin by selecting the most cost effective way to build a diversified portfolio for each client. The individual stock selection process involves an analysis of cash flow a company generates versus the capital used to produce it. We compare this to its historical and anticipated levels versus the market as a whole. Once we have found an attractive equity investment, we use the relative valuations to determine when to buy and when to sell the investment. |
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All investing involves giving your money to someone else (e.g. a bank, a company, a government) so they can use the capital today to produce a return for you tomorrow.