Investment Management

Two Words Guide Our Investment Management

Those two words are ‘Risk Tolerance.’

We don’t believe anyone can guess interest rates accurately, which is why we ladder individual bonds. So, we use a laddered approach in high quality-bonds with a six-to seven-year average maturity to balance the portfolio.

That is important to us as we meet with potential clients and make sure we understand their risk tolerance. Famed Wall Street investor Benjamin Graham said, “the essence of investment management is the management of risk, not the management of returns.”

We believe achieving success increases if we assess your risk tolerance and investment timeline at the start of the investment process. Knowing your risk tolerance will allow Finkelberg Investments to help determine the right mix of bonds and stocks, and to continually monitor your portfolio to stay within your risk tolerance level.

A GEM of a Stock Portfolio

Investment discussion

So how do we determine how to best invest your money? For stock exposure, we use GEM – which stands for Global Equity Model. We select the individual stocks in this portfolio using our proprietary research that follows strict criteria including a company’s financial stability, consistency of earnings, stock valuation and momentum.

Our research starts with thousands of stocks which are screened down to approximately two dozen that meet our criteria. A large part of the portfolio is made up of our individual stock selections of large U.S. based companies, which we surround with funds to gain exposure to international stocks and other sectors. The end result is a portfolio diversified across investment styles, investing processes and company size to help ensure that you are not invested too heavily in one sector.

This distinct, non-emotional approach allows us to continually monitor the portfolio and reassess and reallocate as needed.

Climbing the Bond Ladder

To help balance out the risk of stocks we believe in utilizing individual bonds, which tend to provide stability in large market declines.

We don’t believe anyone can guess interest rates accurately, which is why we ladder individual bonds. So we use a laddered approach in high quality-bonds with seven to eight-year average maturity to balance the portfolio.

This allows us to lock in rates and maintain a better rate should rates go down, but also flexibility to roll into higher interest if rates go up.

Investing involves risk and you may incur a profit or loss regardless of strategy selected.

Bond prices and yields are subject to change based upon market conditions and availability. If bonds are sold prior to maturity, you may receive more or less than your initial investment. Holding bonds to term allows redemption at par value, barring default or an early call at the issuer’s option. There is an inverse relationship between interest rate movements and bond prices. Generally, when interest rates rise, bond prices fall and when interest rates fall, bond prices rise.