INVESTMENT OBJECTIVE DESCRIPTION
Primary emphasis on achieving long-term growth and capital appreciation; generally little focus on generation of current income. Focus on moderate to aggressive equities and/or moderate to aggressive fixed-income instruments. Low to high exposure to interest rate risk; moderate to extremely high exposure to market risk. Exposure to foreign risk and/or currency risk highly likely.
This diversified portfolio is suitable for investors with a moderate to high tolerance for risk who are comfortable with more aggressive investments and investment strategies.
This portfolio strategy begins with a macro picture that helps determine tactical weightings between asset classes such as stocks, bonds, and commodities. We emphasize stocks during the bullish cycle of the economy and emphasize bonds during the bearish cycles of the economy.
Our top-down approach then filters each asset class into its sub-components such as sectors for stocks, corporate or tax-free for bonds, and soft versus hard assets for commodities.
At the micro level, we use fundamental and technical analysis to decide which specific stock, bond, or commodity to add to the portfolio.
Risk management is as important as asset selection. We can employ put protection, short ETFs (exchange-traded funds), and large amounts of cash and treasuries to offset market exposure. These methods can lose value if the market does not fall. In volatile markets, our risk management strategy can create higher than normal trading activity; therefore, volatile markets can increase transaction costs for managing the portfolio.
- Cash and cash equivalents
- Fixed-interest securities (primarily bonds, both foreign and domestic)
- Stocks (this portfolio is likely to contain "penny stocks"—i.e. "low price securities"—which involve unique risks)
- Natural resources
- Precious metals (stock and bullion/coins)
- Industrial metals/infrastructure
- Options (covered calls to generate income, put options to mitigate downside risk)
Other investment products may be considered to be appropriate investment vehicles under specific situations.
Although portfolio holdings are generally long, occasional short index or ETF positions may be warranted by market conditions.
31 December 1997
INVEST WITH US
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