“ Our favorite holding period is forever.”

“ Be fearful when others are greedy and greedy only when others are fearful.”

“Time is the friend of the wonderful company, the enemy of the mediocre.”

-Quotes of Warren Buffet

Philosophy & Strategy > Portfolio Management

Lodestar’s planning and portfolio management strategies focus on two overarching issues: 1) achieving consistent investment returns without exposing investors to “uncomfortable” levels of risk and; 2) striving to ensure that sufficient resources are available to meet financial goals, both in the near and longer term.


These two issues greatly influence not only how your portfolio is initially structured but how it is subsequently managed over time.  Following is more specific information behind our management strategies:

Asset Allocation & Risk
The asset mix between stocks, bonds and cash is determined based on the investment goals, risk tolerance, and any other pertinent considerations and constraints of each respective client. Assuming a variety of hypothetical market scenarios can be helpful in the process of determining the appropriate level of risk that should be assumed for a particular investor.

Diversification
Portfolios are diversified across market sectors and industry groups, with over and under weighting to an industry or sector being a function of valuation at any point in time. The equity allocation will typically have 20-30 stock positions.

Fixed Income

Bond selection is a function of the relative valuation between sectors of the fixed-income market based on historical parameters. We view the fixed-income portion of a balanced portfolio as having a considerably lower risk profile than that of the equity allocation.

Rebalancing
Portfolio rebalancing between stocks, bonds and cash occurs with changes in the client's risk tolerance, investment objectives, and market conditions.

Limited Portfolio Turnover
Because we are long-term and patient investors, Lodestar strives to limit portfolio turnover. Historically, equity turnover within client portfolios has generally been less than 20% annually.

-109.38 DOW: 21,345.23
-97.06 NASDAQ: 6,137.35
-20.25 S&P: 2,420.44