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 is a proven 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 managed under a fully-invested policy, and no attempts whatsoever are made to adjust cash balances in reaction to or anticipation of short-term market fluctuations.
  • Portfolios are diversified among exactly twenty holdings. Proposed new holdings must be sufficiently compelling to warrant displacement of an existing holding.
  • Portfolios are focused on a minimum five-year time horizon and are not explicitly aimed at producing short-term quarterly or interim year-to-year outcomes.
“Investing is a long-term commitment. We stay true to the fundamentals and run the marathon accordingly.”