Investment goals

  • Objective: Determine whether you are seeking growth, income or a combination of both
  • Time horizon: Identify your investment timeframe—near-term: 0–12-months; short-term: 1–3 years; medium-term: 3–5 years; long-term: 5+ years

Investment criteria

  • Sector and industry: Decide on the sectors or industries you want to invest in, based on your analysis or interest
  • Market capitalization: Choose the size of the companies you are interested in (i.e., large-cap, mid-cap, small-cap)
  • Geographic location: Consider whether you want to invest in domestic, international or a mix of stocks

Analysis

  • Financial health: Examine the company’s balance sheet, income statement and cash flow statement
  • Growth prospects: Look at the historical earnings growth and future earnings projections
  • Valuation metrics: Use ratios like P/E (price-to-earnings), P/B (price-to-book) and P/S (price-to-sales)
  • Price trends: Analyze the stock’s price trends and patterns over time

Efficiency

  • Tax efficiencies: Consider the investment and its tax impacts on the client
  • Control: Limit the use of mutual funds for helping control capital gain exposure
  • Tax neutral: Always attempt to offset gains with a loss (if present). Use losses to capture gains and further diversify portfolio

Transparency

  • Management team: Evaluate the strength and track record of the company’s leadership
  • Competitive advantage: Identify the company’s unique selling points or moats
  • Conviction: Limit the use of mutual funds to know what and why a position is purchased, held or sold

Risk assessment

  • Market risk: Consider overall market volatility and economic conditions
  • Sector-specific risks: Identify any threats specific to the sector or industry
  • Company-specific risks: Look for any red flags or potential pitfalls related to the company itself

Diversification

  • Positions: Select 20–30 positions to maximize diversification
  • Market sectors: Consider all 11 major market sectors for portfolio construction; no more than 50% concentrated
  • Industries: Use industries to enhance portfolio returns; no more than 30% concentrated

Monitor

  • Performance tracking: Regularly check the performance of your stocks
  • News and developments: Stay informed about any news or developments that could impact your investments
  • Rebalance regularly: Review and adjust your portfolio periodically to maintain your desired level of diversification

Review

  • Evaluate performance: Analyze the performance of your stocks and the overall portfolio
  • Compare performance: Track progress of portfolio against established benchmarks

Adjust

  • Adjust strategy: Make changes based on changing goals, existing/ forecasted market conditions or shifts in the economic landscape
  • Buy-sell triggers: Stay true to buy-sell discipline

Personalize

  • Personalize: In accordance with the client’s stated goals, risk profile and timeline
  • Approach: No “cookie-cutter” solutions or models
  • Reasoning: Treat each client as if they were our only client and strive to earn their business every day