Philosophy & Investment Policy

GPPW Investment Philosophy & Investment Policy Statement

 

GPPW investment philosophy

Investing in markets should come with at least a 3 to 5-year time horizon. Markets react to emotions of fear and greed, which are the underlying behaviors of investors, but they are driven over time by fundamentals of earnings and the economic environment. With the ability and capacity to trade from many devices and platforms, investors and traders make quick decisions which are not always derived from a strategy or plan, instead from a moment in time. Trend investing is also another source of volatility as investors get anxious and excited to be the “first” into a new idea or industry. Investing in quality companies, generally those that pay a dividend, or have a substantive business model, industry or service is a more reasonable means to performance over time.

 


 

GPPW investment policy statement

We believe in owning quality companies that not only pay a dividend, but have the potential to raise the dividend each year. Companies who pay a dividend, first and foremost, must have consistent earnings since dividends are paid in cash from those earnings. Secondly, dividends are strong indicators of a company’s cash flow and if they are increasing that dividend, earnings are more likely to have increased. Finally, dividends are a way to reduce volatility in the portfolio since the income is paid even if the stock price is dropping. Also, for clients taking income it is an inflation protection and for those that reinvest the dividend it is a compounding factor each quarter as more shares are purchased. This is our overarching philosophy as we construct portfolios for our clients. We may utilize this thought process within our own management of portfolios, or by hiring individual money managers and select mutual funds that have the same theme.