Investment Objectives

Invest in the common stock of companies in an attempt to outperform the S&P 500. This is accomplished by selecting large cap securities which are readily traded in the United States. This can also include internationally based companies. The portfolio has a buy and hold strategy which attempts to avoid active trading. By holding a diverse set of securities with a long-term time horizon this portfolio will avoid the major swings which are experienced by an actively managed portfolio.


General Guidelines-

  • The portfolio should only contain the common stock of companies which have a market cap in excess of $10 billion at the time of purchase.
  • Initial positions will be 3-4.5% of total portfolio value. This will allow the portfolio to hold between 25-30 different securities.
  • The portfolio will maintain a beta of 0.75 to 1.25 in relation to the S&P 500. If the portfolios international exposure increases it is possible to change the benchmark which will be used in the future.
  • Cash will be maintained at 1-10% of the portfolio’s value. This will allow for the purchase of a new position at any given time.
  • Sector weightings should be within +/- 6% of the S&P 500. This could change in the future if international exposure increases.

Buy/Sell Disciplines-

  • The price target calculated by an analyst will be used to indicate when each security should be revaluated. For example, when a company passes above its price target or falls significantly below it the holding will be reviewed by an analyst.
  • Purchase and sale decisions will be made by a group vote. If the vote exceeds two-thirds in favor of an option, management will proceed to execute a trade. However, if the general vote does not reach this level of consensus and management finds issue with the group’s decision then, after discussion, a vote of management will be taken. This vote will be decided by a 51% or greater majority.
  • Trades should be executed within 5 market days of a decision.
  • Companies will be purchased based on their fundamentals and the prospects of appreciation in the value of their stock price over the long term. Dividends can also be taken into consideration when making purchase decisions.
  • When an individual holding falls below 2% of portfolio value it should be evaluated for sale or an increase in that position.
  • When a company rises above 6% of portfolio value it will automatically be rebalance to 3-4%.