We utilize a three-tiered approach to put our Diversified Balanced strategy into practice:
The allocation is then reviewed on an ongoing basis and rebalanced as needed. We can manage to any existing allocation policy or help clients develop the policy that best meets their needs. The mix of securities and funds selected is adjusted proportionately to the client's specific needs.
When developing allocations, we use a structured methodology incorporating three inputs to help us develop an accurate appraisal of the risk/return potential:
Client investment policy and our judgment on the weight of the evidence from these methodologies are translated into the portfolio allocation.
Since 1985, the heart of our investment approach has centered around a company's ability to sustain or improve its earnings power, as defined by return on capital or return on equity. We select investments from a universe of established companies with large, medium or small capitalization by focusing on those firms we believe have the potential to generate strong earnings power and whose valuation suggests that they are underpriced. Central to our philosophy and process is a unique way of diversifying the portfolio across industries to manage risk.
We use a rigorous four-step process to identify companies capable of generating greater earnings power, or value, which sell in the market at low valuations.
In certain circumstances, the application of mutual funds and exchange traded funds may most appropriate for one or more equity classes. In these cases we employ a rigorous due diligence and fund selection process:
Similar to the firm’s equity philosophy, our fixed income approach is bottom-up with an emphasis on relative value and the goal of producing a better return over the long term.
As price fluctuations can be volatile, income is a more predictable component of total return and primary aspect of our strategy. Accordingly, we build portfolios that emphasizes value and income while de-emphasizing potential risk by: