Our Investment Philosophy
Your goals and objectives are the most important part of building an investment portfolio. You want a manager who listens to your concerns and is knowledgeable about the best way to reach your goals.
Central Trust & Investment Company believes a risk-controlled approach with a long-term horizon produces the best results. Risk control means only high-quality investments and stocks of companies that are leaders in their respective fields. A long-term horizon allows our portfolio managers to filter out the noise created by the day-to-day flux in the market. Our managers work to maximize the after-tax growth of your account.
Characteristics of a Central Trust & Investment Company Portfolio
Diversification: Portfolios are diversified across a variety of industry sectors that have attractive long-term growth characteristics. Usually, the account will hold a minimum of 20-25 securities so that overall portfolio risk is minimized. Each position should be meaningful in size so that periods of individual company out-performance have a measurable impact on the overall performance of the portfolio.
Time Horizon: We measure our results on a five-year horizon because:
- Tax deferred compounding is a critical component in maximizing after-tax returns over time. Excessive trading tends to lower long-term after-tax returns due to an excessive taking of short-term gains.
- The probabilities of investment success are higher when the investor has a five-year time horizon. Prices do not consistently increase in line with real earnings growth rates due to the business cycle. However, over longer periods of time, stocks tend to track the ongoing earnings progress more clearly.
Performance: All portfolios managed on a discretionary basis are measured for total return performance over time. Longer-term results are paramount in evaluating our progress relative to the market.
Benchmark: Our fully managed funds are tracked against the S&P 500.
Asset Allocation: While recognizing the achievement of suitable returns is dependent upon the proper allocation of assets, we always defer to the client’s specific investment needs and customize portfolios as necessary to achieve their individual goals.
Mutual Funds: Managers utilize mutual funds when there is a need for specialty representation within the portfolio. Examples include technology funds, international funds and specialty funds such as biotechnology, natural resources, convertible securities, socially responsible investment needs, etc.
