“Our #1 job is to formulate a plan, anchored in sound investment principles, that will help you navigate the storms as well as the calm.”
-Tony DiGiovanni, Chief Investment Officer
The Plan… The Plan… The Plan!
Our belief is that every great investment experience should begin with a solid plan. So before any thought is given to constructing your investment portfolio, it is important to help you determine your financial goals in the context of your income and expenses for the future. Once we identify them, we can help determine an asset mix that will provide you with a return on investment to reach your goals. We will take into consideration your age, tolerance for risk, and the current investment landscape. Our Investment Policy Statement summarizes these components providing a guide that White Pine will use in selecting future investments for you. Just as in life, changes will occur, making consistent reviews an essential part of your plan.
Equities Are a Cornerstone
History has shown that over long periods of time, stocks (equities) are among the highest returning asset classes. It should be noted, however, that higher return expectations come with increased volatility. Your allocation of stocks will vary according to your plan. Most White Pine client portfolios contain 35 to 40 holdings, with an average holding period of four to five years. Although individual securities are the predominant holding in most of the accounts we manage, exchange traded funds (ETFs) or mutual funds are sometimes used to round out the portfolio.
Value Is Important
Our stock selection approach mirrors the philosophies and teachings of such investment pioneers as Warren Buffet, John Templeton, and Benjamin Graham. The cornerstone of this approach is to find companies selling at a fraction of their intrinsic value. Intrinsic value is derived from an analysis of the companies’ expected future cash flows, revenue growth, earnings power, competitive advantages, and strength of management.
When your financial plan calls for it, fixed income securities will be used to provide stability and a steady income stream for your portfolio. Factors we consider when investing in fixed income products include relative interest rates (spreads), investment strength, coupon structure (floating rates versus static rates), inflation protection, call features, and our outlook for the term structure of interest rates. Mutual Funds and ETFs that invest in bonds with these characteristics are our preferred investment vehicles.
Most people define risk as loss of principal. We recognize that there is another risk of equal importance—the loss of purchasing power, also known as inflation. Designing an investment plan requires a balanced awareness of both these risks. An individual can avoid loss of principal by keeping his or her entire net worth in CDs or money market accounts, or, more drastically, by putting it under the proverbial mattress. The problem, of course, is that the return will not keep up with the cost of living.
Our goal is to manage your investments to achieve your financial goals while mitigating the risk of principal loss and maintaining your purchasing power.