HOW WE MANAGE MONEY

Once an appropriate investment strategy is determined for your portfolio, Stellar manages most of your investments internally. The firm focuses on identifying significant and long-term changes in the domestic and international economies and markets. These changes may be a result of factors such as business activity, inflation expectations, interest rates, technology changes, social and political developments or other such events. This analysis guides the Firm towards market sectors or industries undergoing constructive changes that have not yet been reflected in security prices, and away from those with deteriorating prospects.

Portfolios are prudently managed by integrating your specific investment objectives with the prevailing opportunities and risks presented in the investment markets. In our opinion, the resulting portfolios reflect the best method of achieving your investment objectives.

Stocks and bonds are the primary tools that we use in creating and managing your investment portfolio. We incorporate large, medium and small capitalization stocks, value and growth opportunities, and a variety of fixed income investments. We also utilize managed portfolios such as ETFs, mutual funds, or separately managed accounts to focus on specific, hard-to-invest-in areas of the market when appropriate.

Economically favored sectors are studied to find fundamentally sound companies in healthy industries positioned to grow revenues and earnings. Financial and market ratios are used to assess financial stability. This, in combination with economic statistics and interest rates, drives our internal valuation assessment. Technical trend analysis of markets, industries and specific companies complements our ultimate decision process.

Companies fitting the criteria we use that are priced below our internal valuation projections are typically targeted for purchase, and are typically held for long-term appreciation, not short-term speculation.

Bonds, which help reduce overall volatility and provide portfolio income, typically have an average investment grade rating, and consist of U.S. Treasury, Government Agency, municipal, or corporate bonds. The allocation, maturity distribution, and quality of these investments are based on the underlying economic and market environment, projected interest rate trends, and your specific needs.

In general, our investment goals are fairly conservative. We look to participate in market gains while avoiding as much market loss as possible. This strategy seeks to provide a "smooth ride" in the investment markets. Any time an action is taken in one of your accounts, we typically communicate what the action was and why it was taken. It is through this ongoing communication, along with periodic reviews with your portfolio manager, that you will develop a complete and ongoing understanding of how your portfolio is being managed, and why specific actions are being taken.

As already stated, Stellar primarily allocates investment management assets among various securities including individual equity and fixed income securities, exchange traded funds, mutual funds, covered calls on specific securities, and alternative investments and private placements where appropriate. Investing in securities involves risks, and there is always the potential of losing money when you invest in securities. All clients and prospective clients should be aware that past performance is not indicative of future performance and that, even with the most complete understanding of how a portfolio is being managed, investing in securities involves the risk of loss that clients should be prepared to bear.

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Portfolios are prudently managed by integrating your specific investment objectives with the prevailing opportunities and risks presented in the investment markets. In our opinion, the resulting portfolios reflect the best method of achieving your investment objectives.

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