Our investment philosophy
We use a socially conscious, growth at a reasonable price discipline to select equity. We use a combination of top-down and bottom-up approaches that include fundamental analysis, quantitative and technical analysis and is based in a contrarian stance. With a long-term horizon, we purchase stocks with the intention of holding them for five to ten years.
Our investment strategy
Each client at NorthStar Asset Management, Inc. has a personalized portfolio with a tailored allocation. The percentage of investment in stocks, bonds and cash is based on a combination of the individual needs of the client and our market outlook. Once the percentage in equities is established for the client, we average into the stock market as well as average into individual stock and bond positions.
We begin with a top-down approach that directs our sector selection and allocation. In purchasing equities, we search for specific stocks that represent companies with the following criteria:
- A clear vision from management.
- A record of earnings and dividend growth.
- Low debt.
- Proprietary, socially constructive and innovative products.
- Growing margins.
- Earnings growth led by sales growth rather than from manipulating taxes, inventory or offbalance sheet items.
- Stock valuation in line or undervalued compared to expected growth products.
We buy bonds in clients' portfolios to provide them with safe sources of steady income. Depending on client needs, we may purchase federal agency bonds, certificates of deposit, treasuries or municipal bonds. Our strategy is to hold bonds until maturity, and to select bonds that mature at a timeline with which we feel comfortable given current bond yield curves. In general, we match bond selections and maturities of bonds as well as interest rates with the individual needs of the client.
Because of the recent turmoil in the credit markets, we are particularly conscious of the risk of default even on bonds which in prior years had been highly rated by Moody's and Standard & Poor's. The safety of bonds, CD and money markets cannot be taken for granted, and we pay as much attention to putting together a portfolio of bonds that are appropriate for each client - minimizing risk and maximizing yield - as we do when we are carefully selecting individual equity positions.
Portfolio construction process
Quarterly, we examine the industry exposure and the size of the positions within each industry group for each individual portfolio. As opportunity in the market presents itself, we will introduce a new stock or eliminate a stock from portfolios. We make adjustments to our targets as fundamentals in the market shift.
Annually, we evaluate our strategy with an understanding of how each of our decisions affects the larger portfolio. We examine the target versus current percentages for each industry, examine cap weighting within each group and evaluate the discrepancy between our target weightings and the industry weightings in the S&P 500 to determine past performance deviation.