INVESTMENT PHILOSOPHY & STYLE
As managers of balanced portfolios of equities and fixed income securities, we endeavor to make investment decisions based on long-term considerations. We do not attempt to speculate on short-term fluctuations in securities prices, although we try to maintain the flexibility to respond quickly to major changes in the economic and market outlooks. Van Strum & Towne’s investment philosophy is based on these four principles:
1. Capital Preservation
2. Growth of Capital and Income
4. Communication with Clients
Protecting capital and minimizing risk are essential to successfully managing clients’ assets. Recognizing what can go wrong with an investment is just as important as gauging its opportunities for success. Van Strum & Towne has demonstrated its investment expertise in down markets as well as in up markets over the years. Minimizing risk is accomplished by establishing diversified portfolios with relatively low volatility. We recommend appropriate shifts in the asset mix of client portfolios in response to changes in the investment climate, including inflationary or deflationary factors in the economy.
GROWTH OF CAPITAL AND INCOME
Our equity philosophy is growth-oriented. We focus our research on high-quality companies with superior growth characteristics. We equate the quality of a company with its financial strength, operating record, competitive position, quality of management and growth prospects more than with its size or age. We invest primarily in larger capitalization companies, but we also invest in smaller companies when they offer unusual opportunities for capital appreciation, market a unique product, or demonstrate excellence in management.
Consistency is necessary for good long-term performance. Our objective is to minimize risk during difficult periods and to achieve above-average gains in favorable markets, thereby compounding superior long-term returns. While a portfolio strategy must be flexible enough to respond to varying market conditions, performance should also be consistent with client goals and objectives.
COMMUNICATION WITH CLIENTS
Van Strum & Towne begins by identifying a client’s objectives and tolerance for risk. The first step in establishing a relationship with a prospective client is to determine the client’s relative need for income and growth of capital and other financial goals and objectives. Based on these goals, we formulate an investment program and discuss our recommendations with the client. After the initial program has been established and approved, we maintain ongoing communication with the client in order to stay abreast of any changes in these needs or objectives. We provide written reports each time a change is made in a portfolio, as well as regular quarterly appraisal reports.
Van Strum & Towne’s written and oral client reports provide a clear and comprehensive description of their investment portfolio's status and performance. Clients receive customized quarterly portfolio appraisals. Investment performance analyses and transaction schedules are also available. In addition, periodic economic and securities reports are designed to keep our clients informed about changes in the investment environment relative to their financial goals and objectives.