Our Find Your Balance™ Philosophy

Essential to attaining superior investment results is steadfast adherence to a disciplined investment philosophy. At Oarsman Capital, our approach to managing client assets is founded on sound underlying principles:

Portfolio Balance

Every major asset class (e.g., stocks, bonds, real estate) offers powerful return potential. We do not attempt to outguess the market, but rather position each portfolio to benefit from performance boosting trends as they occur. For equity portfolios, in addition to a diversified mix of high-quality domestic companies, we add other equity classes such as international, small cap and emerging market stocks. These complementary asset classes enhance performance potential and, because they do not move in lockstep with the core portion of the portfolio, also help control overall portfolio volatility (risk). For balanced portfolios (e.g., portfolios designed to balance risk and return), we add steady income through bonds and/or bond funds, as well as adding in other asset categories such as high-yield bonds, REITs and natural resource funds.

Risk Control

We believe firmly that controlling investment risk is essential to achieving superior long-term results for our clients. Less volatile investment results also facilitate planning in portfolios that support living expenses or have unpredictable cash flows. Prudent diversification and commitment to high-quality securities are integral to our risk-controlling approach.

While portfolio balance (a hallmark of Oarsman Capital) is a fundamental method for controlling risk, Oarsman takes risk control further by focusing on high-quality security selection. The historical record is clear: investments in securities of high fundamental quality have resulted in the highly desirable combination of preserving capital in challenging investment environments while providing substantial appreciation in more supportive periods.

Stocks

At Oarsman Capital, our definition of a high-quality company is one that is capable of generating consistent earnings and dividend growth. High-Quality companies have excellent management, proprietary products, solid balance sheets, strong return-on-equity, and more often than not, strong international presence.

Bonds

We consider fixed-income securities to be the anchor of the portfolio, providing a predictable income stream and acting as a cushion against volatility. Our bond portfolios generally hold average ratings of A or better, and have intermediate portfolio durations (less than 10 years).

Other (Alternative/Hybrid)

In addition to stocks and bonds, for a much smaller portion of the portfolio (up to 15% in total) we often add “hybrid” securities – those investments that are neither stocks nor bonds.  This additional diversification category includes high-yield bonds, inflation-protecting bonds, REITs and natural resource funds.