Equity Investments
The equity portion of the portfolio should produce capital
appreciation augmented by dividend income.
We recommend a diverse portfolio of companies with large
capitalizations, strong financial fundamentals, outstanding management, and a
history of earnings and dividend growth.
In selecting companies for the equity portion of the
portfolio, we diversify and balance the individual stock selections to
eliminate the unnecessary risk of concentrating in a very few companies or only
one or two industries. Our decisions to
buy or sell individual stocks are based on fundamental analysis and are
influenced by:
·
changes in the financial
conditions,
·
changes in management
direction or the inherent qualities of a company, its products or services,
·
a company’s relative
attraction to other companies in the same industry, and
·
the relation of the
price/earnings ratio to the projected growth in earnings and dividends.
The fixed income portion of the portfolio should produce
maximum current interest with safety of principal. We stress current income over potential appreciation and attempt
to insulate the fixed income portfolio by the following:
·
limit maturities to five to
seven years,
·
stagger maturities equally
within the portfolio to provide reinvestment opportunities every year, and
· select debt securities with above-average credit ratings and monitor the credit worthiness until maturity.