A Time-tested MODEL

THE EQUITY GROWTH PORTFOLIO POLICY

The Equity Growth Policy is the structure and process by which RM+P manages stock portfolios. Companies are not numbers in a newspaper or mobile app but rather publicly traded organizations of people endeavoring to provide goods and services to individuals, other corporations, and government entities. Owning a profitable, successful company has traditionally been a way to build long-term wealth, contributing to the welfare of the owner(s) and society. For our clients, this ownership is represented by diversified portfolios of high-quality common stocks.

Benjamin Graham, the author of Security Analysis, became one of the most influential investment practitioners of modern times; Warren Buffett is famously a product of his tutelage. In a nutshell, Graham’s focus was on the quantitative and qualitative aspects of investing. Our process utilizes a proprietary model and algorithm incorporating fundamentals and valuation. In other words, our policy is based on facts regarding earnings, capitalization, assets, dividends, and more plus our assessment of the pricing of the fundamentals.

Important policy elements are as follows:

To be eligible for inclusion in portfolios, a company must achieve a ten-year record of continuously profitable operation or of unreduced cash dividend payments. These criteria address the quality factor.
Portfolios are typically diversified among twenty holdings which may vary based on unique client needs.
Portfolios are focused on a five-year time horizon and are not explicitly aimed at producing short-term quarterly or interim year-to-year outcomes.

All investments involve risks, including possible loss of principal. Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors, or general market conditions. For stocks paying dividends, dividends are not guaranteed, and can increase, decrease or be totally eliminated without notice. Diversification can reduce (but not eliminate) the risk of loss. When executing an investment strategy using a proprietary investment model, securities selected may perform differently than expected, or from the market as a whole, as a result of a model’s component factors, the weight placed on each factor, changes from the factors’ historical trends, and technical issues in the construction, implementation and maintenance of the models (e.g., data problems, software issues.). There can be no assurance that a model will achieve its objective. Past performance does not guarantee future results.