Process – Equities
The Investment process begins with a thorough understanding of each client’s individual situation. We look at a client’s need for growth and income, their risk tolerance, and their tax situation. Only then are we able to determine the appropriate asset allocation- the mix of stocks and bonds in the portfolio.
Our team of portfolio managers and analysts continually research stocks that fit our stringent criteria. We start with the universe of companies with $2 billion or more in market capitalization. We then do a quantitative screen for companies with the best growth characteristics and those whose price is below what we calculate to be fair value. We then do a qualitative screen to assess the management, strategy and growth prospects of these companies.
The process results in a “model portfolio” that is comprised of 35-40 stocks. Statistics show that this allows for ample diversification and reasonable ability to grow the portfolio. This model portfolio is the basis for the equity portion of a client portfolio. We also maintain an “approved list” of stocks. These stocks satisfy our quality, growth and valuation criteria and allow portfolio managers to customize the client’s portfolio.
We continually monitor the companies we follow, staying abreast of any significant changes that could affect the ability of the stock to reach its price targets.