Model Portfolio Management

Covestor Investment Management sponsors a website that allows BSG&L to act as portfolio manager over two different investment models: a “Growth Plus Income” model and a “Pure Growth” model. Using this website, you can view our actual investment performance since April 2010, track our past investment decisions, and see how the portfolio is currently invested. Both models show current performance compared to a respective index.

Although these models are very indicative of our actual client results, they have several drawbacks when compared to the actual performance of our client accounts. The Covestor models cannot replicate the purchase of individual bond positions in a portfolio, whereas we use individual corporate and government bonds for a large percentage of fixed-income positions. These models, though not perfect measurements, provide a good foundation for researching the wealth management results BSG&L has been able to offer. Below is a brief description of our investment philosophy for each model.

 

Growth Plus Income

This model is designed to yield approximately 5% plus capital growth to exceed inflation. The goal is to approximate the growth of pure growth models, but with less risk and volatility due to the income portion of the model. The model employs dividend-paying stocks, master limited partnerships, REITS, commodity trust and bond ETFs to accomplish the model’s goals. Only positions that are available on the U.S. stock exchanges are used.

 

Pure Growth

This model is designed for growth through capital appreciation. On occasion, income-producing positions may be employed as a buffer against down markets. This model has a higher risk profile than the Growth Plus Income model. The selection criteria used for investments in this model are:

  • Companies with a return-on-investment of 12% or higher
  • Price-to-earnings growth (PEG) ratio of 1.1 or less
  • Current ratio of 1.5 or better

BSG&L’s investment philosophy reflects our belief that companies with good growth, return on equity, and cash reserves will outperform over the long term. Based on our belief, this model will tend to hold positions for a longer period of time than most managers. We feel a good company will go up and down with the market, but will generate higher returns than the market over time. Again, only positions that are available on the U.S. stock exchanges are used.
For more detailed information and performance data for our investment models, please visit our Covester model portfolio site.

The video below illustrates Ben Dickey and the individual process’ that he uses when choosing equity investments along with personal information that helps bridge his decision making for your future.

http://www.youtube.com/watch?v=awbKupslmIE