We manage each of our client accounts individually. Throughout our relationship, we maintain an understanding of your objectives, your risk tolerance, your tax profile, and any special situations, and we manage your portfolio accordingly.
Your funds are held by your brokerage firm, and we provide specific trading instructions to your broker. You receive trade confirmations and account statements directly from your broker. If you don't have a broker, we will work with you to identify a broker who suits your needs.
We meet with you on a regular basis to review your portfolio. And we're always available to consult with you on any financial matter.
We believe it is critical to identify the long-term investment themes governing the equity markets. These themes could be based on demographic factors (aging baby boomers, for example), global dynamics (the growth of the emerging market middle class), or market dynamics (sustained low interest rates impacting the asset class of investor choice). Next, we identify the regions of the world, sectors and companies that are the greatest beneficiaries of these themes. Based on this view, we are likely to be overweight these regions, sectors, and companies.
When buying stocks, we love growth, but we insist on value. Growth at a reasonable price is a strategy that has been shown to outperform the market over time. In these uncertain times, dividends and growth of dividends provides both necessary cash flow and downside protection. We are patient buyers - markets are volatile, and we use this to your advantage to enter positions at attractive prices. We own these companies as long as they continue to be great companies.
We will generally sell when one of three scenarios occurs. If a stock price exceeds our estimate of full value, we will sell part or all of the position. If a stock becomes too concentrated (generally 5-10% of the portfolio), we will sell some of the position. If the company's fundamentals deteriorate and we believe the stock price no longer supports the company fundamentals, we will sell the position.
For taxable clients, we manage accounts with an eye on after-tax returns. We always consider capital gains before selling stocks. We limit short-term gains for taxable clients and whenever prudent will harvest losses to offset gains.