Broad Global Trend Analysis
Our top-down approach is rooted in the belief that the analysis of various global trends is vital when allocating funds to financial assets. Thus, we begin with a broad analysis of global macroeconomic, political, and technological trends, with our objective being to ascertain how these trends will impact the financial markets.
It is only after answering these broad questions that we begin our industry analysis. Our top-down approach leads us to emphasize those sectors that we feel have the most potential in terms of growing their revenues and earnings not only in the U.S., but in virtually every region in the world. Particular emphasis is given to those industries and companies that have a strategic and international business plan that focuses on those countries that display economic vibrancy, including currency stability, rising real incomes, and improving living standards.
While certainly not the least important, examining the individual company is the last component of our analysis. We use a variety of proprietary valuation techniques to assess whether a company warrants investment consideration. With this type of approach, we are both growth and value managers. Rigid analysis of economic, political, and technological trends leads us to the industries that we feel have the most growth potential. We then look for companies that we think represent the best value within those industries. This means that we are going to be overweighted in certain industries and underweighted in others. In many instances, clients rely on Bowen, Hanes to manage their funds in a balanced fashion to include both stocks and bonds. When employing such an approach, equities are relied upon for capital appreciation while fixed income securities are used for stability and income.
The strategy for fixed income places a major emphasis on the following:
Interest Rate Anticipation - Commitments to securities are made when value is perceived from both a price and yield standpoint.
Preservation of Capital - Quality and safety are of paramount importance when selecting bonds. Thus, we emphasize investment grade securities when making commitments.
Buy and Hold Strategy - The objective is to provide both income and stability as opposed to seeking a total return through aggressive trading.