Using individual issues of marketable securities in your traditional stock and bond portfolios provides
- customization
- flexibility
- maximum control
Issue picks are goal focused, based on managing your risk and return profile through sector, firm size and foreign weighting. As a result, issues are selected for your unique account using a mix of basic and time honored tools.
Asset Mix
An overall asset allocation is set based on your needs and finds the balance between the risky and less risk asset classes.
Sectors
To add another layer of risk control, the sector framework of your portfolio are weighted according to S&P500’s sector weights.
Stocks
SCM uses a three factor screen on the stock field to whittle your issue pick down to a manageable size of one hundred, called our Followed List. The factors in the screen are
- leader quality
- market share
- growth of products
First, this Followed List is watched for a period of time before adding to your holdings. Then, only the strongest stocks in each sector are used with the best prospects. Finally, once the first factors for your stock purchase have changed and another stock outside the account is thought to add more value, a trade is made.
Bonds
The top features bonds in terms of principal and rate risk control are well known. Then, SCM constructs portfolios of primarily investment grade bonds and preferred stock with laddered payouts and staggered pay periods.
Cash
Money market funds are the primary vehicles for keeping funds liquid. Also, other instruments such as US Treasury Bills and commercial paper are available.
Foreign
Most global wealth is based outside the US. SCM taps into the return opportunities around the world while using this exposure as a risk modifier by allocating a portion of the portfolio to global ETFs. These ETFs invest in blue chip companies in developed and developing markets.
Lastly, the alternative to individual portfolios is ETF portfolios (exchange traded funds). For more information, visit our ETF section.
