We believe that over time, companies that tend to be good investments generally have similar characteristics: growing cash flow; increasing sales and assets; strong balance sheets; products and business lines that have competitive advantages; rising dividends; and a low ratio of market price to sales.
Equity holdings are selected primarily from the universe of mid and large cap U.S. companies. We believe these securities tend to have a blend of risk and reward that is appropriate for our clientele.
A portfolio of 35 to 50 equity holdings, diversified across economic sectors and designed to address domestic and international trends, can help to provide competitive returns over time.
Additionally, we believe that high equity turn-over is counterproductive. Our goal is to own stocks at least through a market, product or management cycle—perhaps three or four years—and often much longer.