Why our strategy is a better way to build wealth
Long-term visibility. Since we are taking a long-term approach to building wealth, our focus leans toward stable boring companies with more predictable futures. We don’t focus on the next big trend idea. Our primary consideration is that the company will still be around in 10 years’ time, i.e. they will not be innovated out of existence.
Company size. Our focus is on small to mid-cap stocks where good research is more likely to uncover value opportunities. This is in contrast to the more heavily traveled large-cap sector where the market is more efficient.
Large inventory of pre-vetted ideas. Having a large stable of pre-vetted companies that we wish to own enhances the likelihood that one of them will be on sale. Of course, this is where the real skills come into play. Good research and a solid understanding of how to assess a company’s value and future prospects is critical.
Patience. This is probably the single most important element in investment success, i.e. waiting for the right opportunities. There are no forced allocations. We only put capital to work if there are exceptional opportunities. This is in contrast to being invested in a mutual fund, where for the most part 100% of your capital is always invested regardless of the quality of the opportunities available, and also differs from a dollar-cost averaging program which allocates capital regardless of valuations.
Managed risk. We limit allocations to any one name and don’t overexpose you to any one industry.
Taxes. When we purchase a company, our intention is to hold it for a very long time, so we don’t expect to trigger many taxable gains. This is particularly valuable to you if you have already maxed out your tax-deferred accounts.
Fees. High fees can be a real burden to your portfolio. Our fee is a simple 1% of assets with no performance fee.