Diversified Equity Portfolio

The Diversified Equity Portfolio invests primarily for capital appreciation in growing industries and for high and growing income in mature industries. Our goal is to use income stocks to reduce the volatility of growth stocks and produce an overall portfolio with volatility that’s about average. The income producing segment of this portfolio is designed to provide a cushion in declining markets while the more rapidly growing companies are expected to boost returns in rising markets. This portfolio typically contains around 50 stocks.

Although our goal is to be broadly diversified, we may decide to exclude some industry groups and overweight or underweight others based upon our expectations for relative performance. This overall portfolio has average to above-average risk (beta) with a high overall dividend yield. That yield is expected to cushion the impact of declines and add incremental returns in rising markets. The result is a portfolio whose goal is to decline less than average in falling markets and produce an above average return in rising markets.

Although there is generally a very wide range of stock market capitalizations, this is a mid-cap portfolio overall. It is designed for clients willing to take an average amount of risk that may also be interested in moderate income. It should be noted that the stock market sometimes defies our best efforts to manage volatility. As a result, the investment risk for this portfolio may be above average in declining markets.

Note: Composite quarterly performance for the Diversified Equity Portfolio is available upon request.