Our firm offers customized portfolio management.
All of our customers’ portfolios are individually managed with their unique objectives in mind. We prudently diversify their portfolios using a mixture of individual securities and no-load mutual funds. We believe our active, multi-styled, multi-cap portfolio management process is very unique.
While asset allocation is important, we believe there is more to it than targeting a percentage of the portfolio in bonds, equities and a balance in cash. Close monitoring of various domestic and global economic measures contribute to our portfolio management decisions. Changes in political policies are also incorporated into our decision making.
Most of our portfolios have some fixed income holdings. We incorporate factors such as yield and credit spreads when determining the most attractive segment of the fixed income market to invest. The total return potential, as well as the current income being paid by different fixed income securities, is viewed in the context of our customers’ desired income, tax bracket and time horizons.*
As for equities, we consider all market sectors in the S&P 500. We are careful not to over-diversify the equity holdings in our customer portfolios. We believe adding too many holdings can increase our portfolios’ correlation with the overall market, something we strive to avoid.
When choosing individual equities, our discipline incorporates technical, as well as fundamental analysis. Technical analysis is critical when determining whether a security has an attractive risk versus reward profile and is at an attractive entry point. It also has proven to be invaluable when the need for cash arises and we need to evaluate candidates for sale.
In addition, because technical analysis does not incorporate forecasts, it is a pure objective contributor to the investment decision process. It removes the elements of subjectivity and emotion from the decision making process. Our belief is customers hire us just for this reason!
Briefly, we believe when market participants are buying the same securities, what differentiates us from our competitors is when we buy them. This philosophy has proven to be invaluable to our Chief Investment Officer for over 30 years!
The result of our disciplined, unique management process is that our portfolios have been constructed over the course of several weeks, even months. Though no one can ever completely remove market risk, we believe our disciplined approach reduces the risk of “investing at the top of the market”. Our process is definitely a bottoms-up approach. Equity holdings have attractive fundamental valuations, as well as technical factors. The result is a portfolio that is diversified across equity market sectors. Portfolios hold securities considered to be “value” stocks as well as those considered to be “growth” stocks. Core equity holdings are typically large company stocks with household names. These are surrounded by medium and smaller size companies which offer higher growth potential.
Though past performance is no indicator of future returns, we believe our investment philosophy and our disciplined, multi-styled, multi-cap approach contributes to reducing risk while contributing to attractive, risk adjusted returns in all types of market environments.**
*In low interest environments we may look for securities which pay attractive yields, offer attractive total return, and would treat these as bond “proxies”.
** A copy of our Client Brochure and Form ADV Part 2B is available and should be read prior to retaining Eden Prairie Capital Management LLC.