Summary investment approach

Most of the client portfolios we manage strike a balance between stocks, bonds, and cash equivalents. Whenever we allocate capital, we will consider each investor’s unique liquidity needs, investment objectives, time horizon and risk tolerance.

Point-To-Point Investment Group believes that a well-structured growth portfolio should be actively managed across passive index mutual funds. To a lesser extent, we will incorporate actively managed securities and investment products. While we strongly believe in diversification, we will not diversify an account solely for the sake of diversification. We will not own an investment simply to plug a diversification hole or just because it fits neatly into a contrived style-box.

The common stock portfolios we actively manage will typically hold both large and smaller capitalization securities, both domestic and foreign. Here we seek to own well managed companies that are growing their businesses because they are creating products and providing services that their customers feel they must have.

We understand there’s an operating company behind every security market quotation that requires careful scrutiny. Accordingly, each stock investment we own is measured on the basis of the level, quality, and safety of present and expected future cash flows.

We view future investment returns as a byproduct of the price we pay for an investment today. A lower current valuation on the basis of business fundamentals such as dividends, earnings, book value, and revenues suggests to us a higher expected investment return down the road. So, in this sense we like to think of ourselves as value managers. But oftentimes we will consider a company’s value on the basis of non-physical, intangible assets, such as brand recognition, goodwill, patents, trademarks, copyrights, proprietary technology, and customer lists. Because we will own technology and health care companies in our actively managed stock portfolios, some people might tend to think we are more growth than value.

In certain circumstances we may use third party, separate account managers. Here we insist on working with professionals who have a proven track record and share our same guiding investment principles.

Point-To-Point Investment Group understands there are bound to be periods of extreme financial market stress. In these times a well-diversified portfolio with a value twist may not be enough. Instead of staying the course or remaining fully invested over the course of what might appear to be an extended bear market cycle, we will sometimes take decisive tactical action and raise cash reserves to help protect portfolios. Our tactical process is based on an extensive study of previous bear markets and current valuation metrics.

For investors who require shorter-term liquidity we will generally construct a portfolio of direct bonds. In most fixed income situations, we will actively manage duration across core bond mutual funds. Our investment process is based upon an ongoing analysis of market trends and relative value.

While owning individual bonds outright tends to mitigate interest rate risk, we prefer a mutual fund structure in our fixed income client portfolios for several reasons. First, we believe an investor’s fixed income capital should be managed by seasoned professionals who specialize in such a large and complex segment of the securities market. Second, we feel that we can better diversify a client’s fixed income portfolio with mutual funds. And third, because bid-ask spreads in the bond market can oftentimes be quite large, institutional investors such as mutual funds have a far greater ability to execute transactions at more favorable terms for their shareholders.

In closing, we believe our extensive investment lineup and process can meet the diverse needs of most investors in a multitude of market conditions. While our thinking is dynamic, we will never abandon our basic values or attempt to be all things to all people. Our approach is not high frequency trading, theme-based speculation, short-term market timing, or performance chasing. At the core, we are passive - index. At the margin we are value oriented and tactical. Our time horizon is multi-year, and we think and operate that way for our clients and our own families each and every day.

Please contact us for more information if you wish to set up a consultation.