The Stonebrooke CommonSense strategy is all about risk management. For the majority of our clients we offer a balanced investment approach. Portfolios contain nearly equal balances of bonds and stocks. As value-based investors, we take a more sensible approach, never getting carried away with the latest trends or theories, seeking out reasonable value.
Our top down analysis keeps track of many macroeconomic inputs and with this information we determine the optimal mix for stocks and bonds within client portfolios. We believe a balanced approach will over time achieve more consistent and reliable results.
For those clients who would like more growth and are willing to accept more volatility we offer a momentum based strategy.
Our momentum growth portfolios are for higher risk clients and incorporate more active management as we often rotate among specific market sectors. While higher risk should lead to higher returns over the longer term, in the shorter term portfolio returns are extremely sensitive to the business cycle. Many investors and portfolio managers alike take too much risk at the wrong time of the business cycle. Understanding business cycle dynamics is an important part of the risk management process.
When looking at individual companies, investment criteria include strong free cash flows, good returns on invested capital, identifiable and sustainable competitive advantages, and reasonably leveraged balance sheets. We combine strong fundamentals with the evaluation of less tangible characteristics such as strong management teams with ownership in the underlying company, proven track records and strong corporate governance.