Investment Strategy - SilverOak Investments

Customized Portfolio Construction

Our investment philosophy and individual customized portfolio construction is primarily focused on two areas. We have clients with portfolios containing individual stocks and we have clients with portfolios that contain a mix of low cost ETFs (exchange traded funds) and specialized value added Mutual Funds.

For our custom stock selection services we have a simple, straightforward, and easy to understand philosophy. We buy companies that have a competitive advantage against their peers and ones that are priced at a large discount to their future projected profits and cash flows. We attempt to avoid companies that are losing money, have any accounting irregularities or are overvalued based on historical standards.

Perhaps the biggest advantage of this strategy is that we not only grow and protect your wealth, but also invest in the most tax efficient manner. Some competitors use “models.” For new clients these “models” will purchase the same percentage of a particular stock that has appreciated in value greatly and that every other client may have owned for years. That might not be the best investment for a new client just starting out. Every client and especially new clients need a thorough review of their current holdings and a proven process for identifying and purchasing new holdings regardless of what other clients have in their “models.” A disadvantage of the autopilot model is the constant buying and selling of individual securities. You may see on your statement every month small amounts of shares constantly being bought and sold with seemingly no rhyme or reason. Not only does this create tedious work for your tax professional, but the constant portfolio turnover creates taxable gains and losses and for the short-term those gains are taxed at ordinary income rates! (Please consult you tax professional for more details).

Mutual Funds & ETF

For our mutual fund and ETF clients, we have a simple and defined strategy. We focus and invest in funds that are low cost and have great long-term risk and adjusted rate-of-return characteristics.

Let’s be honest; it’s difficult to provide value and differentiate ourselves by being a better “mutual fund picker” than our competitor down the street. So when it comes to funds why not focus on managers or index funds with long-term, consistent performance at a low cost.

The stock market has gone up significantly since 2009. It is not as cheap as it has been in the past and now more than ever it is critical to have your portfolio reviewed to protect your gains, understand your tax liability, and manage risk from a portfolio and individual security level. Simply spreading your money or diversifying into anything and everything is not a risk reduction strategy.

Making strategic financial decisions is critical now and for the security of your future; SilverOak Investments can help you achieve peace of mind.