OUR CORE INVESTMENT BELIEFS

1) We believe that the most important thing in developing an investment program for a client is to design it to meet the clients future goals, needs, expectations, and risk tolerance.

People need to have a plan that is very likely to succeed, and is tailored to them. For instance, one person can have financial independence with only a 5% long term investment return, other people will not have enough money unless they get a 10% average return. Some people have a low worry, long term mentality, other people worry about each day's news; so a portfolio should be designed for them.


2) We believe in knowing and using proven long term investment principles and methods.

Some of those which we hold to be dearest are:
a) Use careful diversification. This diversification should use several investment categories, which are also called asset classes. And within each category, there should be broad diversification into individual securities which mutual funds give. We do not believe a rigid, or static diversification, gives the best performance. As the markets and other things change, we believe in adjusting the investment strategies and diversification programs. We acknowledge the difficulty of predicting the markets, but we believe that some investments trends are fairly obvious and should influence a managed portfolio.

b) We believe in capitalism. Owning stocks is essentially owning corporations and corporations are a core building product of free enterprise and capitalism which are such proven principles.

c) We believe that investing in fundamentally strong and growing companies at reasonable values is better than investing in what is currently popular and high priced. A part of the clients' portfolio can be invested in aggressive investments, but these should be chosen by fundamental investment research.

d) We believe that long term economic trends drive the markets over the long term. Trends such as businesses using more technology; larger and larger businesses striving for business efficiency; and baby boomers saving more for retirement; drive the markets and should influence investment strategies.

e) We believe many other things should influence investment strategies and policies, such as taxes, costs, and fees.


3) We believe that a prudent investor should strive to avoid common mistakes of investing.

Some of these include:

a) Chasing what has just gone up greatly or selling what has just gone down unreasonably. This causes people to buy high and sell low.

b) To allow emotions to direct investment moves, like allowing fear to drive one out of the markets or allowing greed to influence decisions.

c) To let investing become gambling. There are so many people being sucked into day trading, momentum trading, penny stock investing, etc. which appeal to greed and gambling.

d) Being short sighted instead of investing for the long term with proven long term methods.

e) Not planning on living a long time. I know of several people who ran out of money in their 80's because they thought that they would die in their 70's. Many of us will now live to be more than 100 years old.

f) Being snowed by a slick sales pitch. It is not just the unsophisticated person who gets suckered into a bad deal. Many people just don't know enough to see past the good appearance of many poor investments. Please remember that tons of bad investments have been bought my millions of people who listened to good sales talks.


4) We believe that the many types of investment risk should be known and reduced.

We believe in applying many methods to reduce the risk of losing money. Some of these are:

a) Allowing time to smooth out the ups and downs of the market. People should keep invested through the down times.

b) Diversify into several asset categories which are not closely correlated. Categories such as large size, small size, and international stocks plus different types of bonds and real estate holdings should be considered and used.

c) Diversify into many securities within each category.

d) Reduce market risk by reducing holding which seem overpriced, such as developing markets and energy stocks in 2008. and real estate and mortgage stocks and bonds in 2007.

e) Reduce investment manager mistakes by investing with proven investment managers with long term records of success.

f) Reduce timing mistakes by investing by installments.

g) Paying attention to estate and income tax laws to reduce losses due to taxation.

Investments outside the United States involve special risks such as currency fluctuation, political instability, differing securities regulations and periods of illiquidity.

We look forward to having you call or come by to discuss our investment philosophies and how they fit with you and your investment programs.