OUR INVESTMENT PHILOSOPHY
When it comes to individual investment advice, at The Gwynedd Company, we invest for the long term. Our first priority is always capital preservation. We utilize rigorous fundamental analysis to invest in high-quality companies and investment funds with quantifiable histories of earnings growth and balanced risk/return characteristics.
Capital preservation. To preserve wealth, we begin by setting asset allocation guidelines among three investment "buckets"... equities, fixed income instruments, and cash. Each client portfolio is structured to conform to a client's tolerance for market volatility, investment time horizon, income needs, and tax considerations.
Commitment to equities. We believe that a portion of every client's portfolio should be dedicated to high-quality common stocks or mutual funds investing in equities. Equities remain the most effective means of significantly outpacing inflation and are the best vehicle for maintaining purchasing power over time.
Reasonable prices. To moderate risk and achieve better capital appreciation in the portion of our client equity portfolios, we adhere to a strict pricing discipline. We buy equity growth companies and funds at what we perceive to be reasonable prices, typically with lower price/earnings ratios and/or lower fund costs.
Avoidance of market timing. We do not believe that it is possible to predict future stock market movements with any degree of consistency; thus, we do not operate as market timers. Rather, we rely on the specific asset allocation guidelines that we establish for each client, review these guidelines on an ongoing basis and make individual judgments to suit the needs of each client's portfolio.
Diversification. Prudent diversification to moderate risk is reflected in all of our client's portfolios. We generally hold 20 or more equity or fund positions diversified among various industries and market sectors, depending on the size of the client portfolio.