Thursday, June 17, 2010

HORAN Capital Advisor's Philosophy & Approach

The rules for successful investing do not change just because the environment has become more uncertain. At HORAN Capital Advisors, we believe investing begins by clearly defining one’s philosophy and approach. Managers who stray from their discipline tend to reach for market returns and ultimately get caught in short term situations that can produce negative outcomes. A thoughtful, repeatable approach that emphasizes high quality investments can navigate volatile markets and provide for sustainable long-term outperformance.

Attractive rates of return are achieved with dynamic asset allocation and a focus on high quality investments. Our philosophy emphasizes the importance of fundamentals and valuations. Investor euphoria and asset bubbles occur when fundamentals and valuations are ignored.; therefore, screening for high quality securities takes patience and a disciplined process. The capital markets always present opportunity and value is added when undervalued investments are purchased and overvalued ones are sold.

When we look at specific securities, the screening process must be clearly defined. For example, we approach individual equities by identifying criteria defined by a high quality approach. Companies must exhibit consistent growth, management strength, market dominance, and financial stability. Frequently, the byproduct of these metrics is a consistent dividend distribution. A company with the availability to grow its dividends is a sign of strong cash flow and profitability.

The world has become a different place over the past decade. Household wealth has seen significant variations leading to nervous investors. Volatility may likely remain as the world reacts to sovereign debt issues, geopolitical concerns, and policy changes. Patient investors will find opportunities to invest in securities that have attractive valuations and growth characteristics.

A strong and communicative client relationship enables us to establish an appropriate asset mix utilizing the global opportunity set. Our investment philosophy and core approach helps clients achieve their long-term goals and objectives.

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