Investment results and the risks that your investments carry have a huge impact on your well-being — financial, personal, and mental. Accordingly, Townsend takes the business of investing very seriously, with the dual goal of preserving your capital and earning the high returns available in equities. We focus on value, as well as the factors that will likely influence your investments. And because times change, we also want to understand the broad investment backdrop and risk environment.
One of the most important elements of investment success is a workable and sensible investment philosophy that is applied consistently.
Many professional investors and traders operate without an investment philosophy and are either 1) short-term oriented and trade often; or 2) they give you an investment portfolio that looks like a benchmark such as the S&P 500 (called closet-benchmarking). Accordingly, they trade too often in the hopes of making a quick profit, or they are happy to give you a market return. We believe strongly that you deserve better.
A long-term oriented portfolio of well-researched investments can give you high returns with low risk. Why do most investors who trade often fare so poorly? Imagine driving in traffic. On a highway full of cars some will constantly change lanes to try to get where they are going more quickly. But in traffic, as in investing, changing lanes doesn’t get you there faster. It gives you an illusion of going faster, but in the end all it does is create more risk of an accident. Similarly in investing, many investment advisors will chase popular stocks that have risen in price in an attempt to outperform their peer group. This is what famed investor Seth Klarman calls the “performance derby”. The performance derby induces advisors to take excessive risks and, because past price moves do not predict future price moves, it does not work out well for their clients.
Our investment philosophy provides a framework for our decision-making. We apply this philosophy to every investment decision we make for you across strategies. At Townsend, our philosophy is multifaceted, and the overarching goal is to get you high value for your investment dollars. As Warren Buffett, would say, “we try to buy dollars for 60 cents.” Essentially it boils down to assuming risks that are likely to be well-compensated and to avoid losses.
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Please Note: No portion of the video content should be construed by a client or prospective client as a guarantee that he/she will experience the same or a certain level of results or satisfaction if Townsend is engaged, or continues to be engaged, to provide investment advisory services.
Securities offered by Registered Representatives through Private Client Services, Member FINRA/SIPC. Advisory products and services offered by Investment Advisory Representatives through Townsend, a Registered Investment Advisor. Private Client Services and Townsend are unaffiliated entities.
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