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Quality, Not Speed
Lance Armstrong’s formula for
cycling success parallels sound investment
management. Like cycling, successfully
preserving and growing wealth requires
preparation and discipline. Armstrong’s
unprecedented seven consecutive Tour de France
victories highlight these principles. Known for
his strict diet and meticulous training regimen,
Armstrong’s most overlooked but greatest secret
was his race-day strategy.
The Tour de France occurs over 20 days (or
stages) and over varying terrain. While many
riders try to win each and every day, this
approach leads to unnecessary risk and exhausts
rider’s resources during the stages least
important to achieving overall victory. |
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Lance’s secret? Don’t try
to win every day. Winning an average of only 3 of the 20
stages enabled Armstrong to claim his Tour victories. By
riding conservatively when others were taking
unnecessary risks, and taking risks when the reward was
commensurate, he was able to win on the days that were
most important to achieving overall victory. We manage
portfolios the same way.
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Lance Armstrong’s
Recipe for Success: Only Take Risk When it
Counts |
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1999 |
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
| Overall
Finish |
1st |
1st |
1st |
1st |
1st |
1st |
1st |
| Total
Stages (Days) Raced |
20 |
21 |
20 |
20 |
20 |
20 |
21 |
|
Number of Stages (Days) Won |
4 |
1 |
4 |
4 |
1 |
5 |
1 |
Like the Tour de France,
investing occurs over many time periods and over varying
terrain. Rather than trying to win every day by
predicting market movements or chasing hot stocks, we
take investment risk only when it is well understood and
the potential return rewards our clients for taking that
risk.
Investing in mutual funds is in essence investing in the
entire stock market, or like trying to win every stage
of the Tour de France. Since it is very difficult to
identify and manage risk and taxes with mutual funds, we
believe that wealth is best preserved by utilizing
individual stocks and bonds. Thus we invest client
portfolios intended for growth and inflation protection
in 15-20 carefully researched individual stocks, with at
least a 3-5 year expected holding period. We utilize
cash or high quality bonds to preserve liquidity or
generate income.
Investment Process
Our primary investment goal is to achieve previously
established client objectives, such as accumulating a
desired amount of retirement savings. Therefore, before
we make any investment decisions, we complete our ENGAGE
financial planning process, which enables client and
advisor to jointly establish investment objectives,
identify any constraints or limitations and understand
the client's tolerance for risk. The result is a
client-approved target allocation of stocks and bonds
for each client.
Avoiding Trouble
Since preserving your
wealth is our first priority, we emphasize quality, not
speed, when making each investment decision. We will
make no investment that we believe will jeopardize the
attainment of client goals.
And just as your financial plan is an ongoing dynamic
process, so is each investment continuously
monitored and evaluated by us personally. Our clients
invest with confidence because they know that we are
committed to an investment methodology that is not only
proven to be con-sistent, reliable and repeatable in any
market environment, but is also tailored and maintained
in accordance with their individual financial plan.
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