To build a stock portfolio we start by looking for well-managed companies with good earnings growth that are selling at reasonable valuations!
To find them, we use fundamental factors, which include valuation, momentum and other techniques used in equities research.
We identify the investment objectives, fine-tune the processes to meet that objectives, identify the sources of returns, construct the portfolios, monitor and adjust them as necessary.
Increasing the Odds of Success!
Nothing guarantees success when investing in the stock markets, but there are tools and resources that can increase the probability of superior investment performance, and we do try to employ them all.
We promote ideas and in-depth research from around the world. To make sure we have access to every aspect of every company, we have also formed extensive alliances with international experts to provide market analysis and perspective.
Risk management is a science and when it comes to it, we believe that ongoing analysis and quality control are the keys to improved performance and to protecting our clients from unnecessary risks.
We set parameters and monitor risk across all strategies, review sector weightings and individual stocks on a daily basis, track where we are relative to specific benchmarks and our competition, and adjust our holdings as appropriate to the ever-changing world market environment.
Our global network is the foundation of our research effort, while the scope of our operations provides us with superior management access and trade execution virtually anywhere in the world.
Furthermore, we work with top investment managers and we support them with exceptional technology and information resources that lead to the most profitable and productive actions.
What about the "Long-Term?"
While reinforcing the need for patience, the markets performance during the past years has put many investors who claim to be long-term investors to the real acid test!
Our portfolios are designed to meet long-term objectives, and long-term does not mean the next month or the next year! They could very easily mean five years down the line when i.e. your first child goes to college or 30 years from now when it is time for your retirement.
Portfolios are put together to weather and even benefit from market cycles, not to be torpedoed in the middle of them.
That is why investors must always ask themselves why they want to invest in equities and what they really mean by "long term!"
In our opinion, if the investors don't have their targets clearly focused they should not be in the markets at all. They would be better off putting their money into bonds and money market funds, or better yet... under their pillows!
And if they are in for the long-term, investors should do everything they can to ignore the pains of a down market. The time will come when the fall of i.e. Enron and/or WorldCom will be just a tiny footnote rather than a major front-page headline.
During the past years we have witnessed a brutal and confusing period for the stock market, with twists and turns that kept ignoring all historical trends.
Normally, one might take heart at the fact that, since the Depression at least, declines such as the 2001 - 2003 that we have lately seen have come near the end of bear markets and been followed by rapid advances.
But again, we seem to be in a period where historical patterns - for the short term at least - are not a certain guide anymore.
Basic rules and common sense were forgotten in the "gold rush" of the late 90s, but have been painfully reinforced and reactivated by the 2001 - 2003 stock market's declining performance!
There is always risk involved in equity investment. The last bull market, when every stock from i.e. Internet start-ups to blue chip companies steadily kept on rising, was an anomaly, and it is not due for a fast return. The sooner we accept that the better will be for everybody!
And as difficult as it may be to believe it, during this severe bear market, there are always certain excellent buying opportunities to be found.
In fact we do believe that sometime during the next years we will look back to this point in time and see it as having been the ideal one for buying stocks ...
The right stocks, that is!
Beating the market takes a little luck, a huge effort and constant hard work; and as we have shown, that we are well equipped to the challenges of capitalizing on opportunities!