Our firm offers customized portfolio management.
Our portfolios are actively managed with our customer’s unique investment objectives in mind. Eden Prairie Capital Management has a multi-styled, multi-cap portfolio management style which we believe is very unique, especially in today’s financial services industry. All of our portfolios are prudently diversified using a mixture of individual securities and some no-load mutual funds.
While asset allocation is important, we believe there is more to it than targeting a percentage of the portfolio in bonds, equities and cash equivalents. Close monitoring of domestic and global economic and political events contribute to our portfolio management decisions. We do not consider age of our clients to be the primary factor when allocating assets between asset classes.
In addition to equities, some of our portfolios own fixed income securities. These include individual tax free municipals, as well as bond mutual funds. The total return potential, as well as current income being paid by these holdings, is viewed in the context of our customers’ desired income, tax bracket and investment time horizons. In low interest rate environments, we are apt to substitute high yielding equities as proxies for fixed income.
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.
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.