WE THOUGHT THIS WOULD BE A GOOD OPPORTUNITY TO PROVIDE SOME CLARIFICATION TO OUR READERS ABOUT HOW GUILD INVESTMENT MANAGEMENT INVESTS PORTFOLIOS.
GUILD INVESTMENT MANAGEMENT MANAGES MONEY IN GLOBAL STOCKS, BONDS, AND ETF’S.
Global means we can invest in opportunities in Europe, North America, Asia, Latin America, etc. We prefer to focus our investments in a few areas based on the themes and trends that appeal to us.
The great majority of all investing we do is in stocks. I have received some inquiries from readers who think that because we frequently mention commodities in our pages that we own commodities. We do not buy commodities directly. WE BUY STOCKS.
GUILD DOES NOT BUY PHYSICAL COMMODITIES OR COMMODITY FUTURES IN OUR PORTFOLIOS.
While we typically invest using equities, occasionally we use exchange traded funds (ETF’s) which mimic the price movement of a commodity, say oil or gold.
For years we have said that oil would rise, but we have not bought physical oil or oil commodity futures. For years, we have been saying gold will rise, but we do not buy physical gold or gold futures for our clients’ portfolios.
Take oil for example. We may buy companies which produce and explore for oil, companies which supply goods and services to the oil and gas exploration companies, pipeline companies or others who transport and ship the oil or refiners who process it.
WE BELIEVE THAT STOCKS ARE THE BEST WAY TO PLAY GLOBAL THEMES.
There are several reasons for this.
Equity markets are ubiquitous. Stocks exist globally and they do a pretty good job of reflecting the local economic and political environment in their industry and home country or area.
Equities provide a great opportunity to benefit from new technologies, new macro developments, new industries, and new trends. One does not need to employ leverage (borrowed money) to enjoy appreciation in stocks. Guild does not employ leverage for most of our accounts. Our aggressive growth accounts employ some, but their use of leverage is limited. Our income and conservative growth accounts employ no leverage.
WE DO GLOBAL ECONOMIC, SOCIAL, AND POLITICAL RESEARCH ON MACRO TRENDS…AND…WE ALSO DO IN DEPTH COMPANY LEVEL RESEARCH; VISITNG COMPANIES’ CEO’S, CFO’S, AND EXECUTIES TO BETTER UNDERSTAND THE MECHANICS OF SPECIFIC COMPANIES’ BUSINESSES.
Doing both extensive research on the macro trends, often referred to as ‘top down’, and doing the internal ‘bottom up’ research on individual companies is not common in the investment management industry. Most managers focus on either top down, where they look at global macro trends, or more commonly they focus on bottom up research by calling on company managements and discussing their business with them.
We do both at Guild Investment Management. It is more work, but we believe that it is the reason that we have successfully managed client portfolios since the 1970’s. We are proud of our track record. For information on our investment portfolio management services and our track record, please contact our office at 310-826-8600 and ask for Tim Shirata, our Director of Operations or Aubrey Ford in marketing.
Guild Investment Management has a research staff, and both of our principals have strong research backgrounds, so several analysts are available to investigate and analyze trends among industries and stocks, and to call or meet with in person company managements to understand the details of their businesses, the headwinds they face and the tailwinds they enjoy.
IT IS OUR INTENTION TO ONLY OWN THE INDUSTRIES WHICH ARE PROSPERING. WE LIKE TO INVEST IN AREAS WHERE THERE ARE TAILWINDS, AND WHERE WE ARE COMPENSATED WITH ENOUGH PERCEIVED UPSIDE POTENTIAL AS THERE ARE ALWAYS RISKS WHEN INVESTING.
In our experience, thorough research and disciplined analysis of returns and risks increase long-term success. We weigh the relevant pieces of information, estimate the risks of the unexpected, anticipate change, and then make judgments based on the odds, with the knowledge that success is never guaranteed. Uncertainty is an unavoidable part of investing and it is naïve to believe that it can be eliminated.
In our opinion, the flexibility to concentrate when we believe opportunities are present and to reduce exposure when risks dictate caution has been a key to our success.
AS WE MENTIONED EARLIER, WE PREFER TO FOCUS ON A FEW SECTORS, INDUSTRIES, AND COUNTRIES THAT ARE DOING WELL. RIGHT NOW, WE BELIEVE THAT MOST INDUSTRIES HAVE STRONG HEADWINDS, AND ARE NOT ATTRACTIVELY VALUED…SO WHY OWN THEM?
Many money managers try to replicate the market; owning a certain percentage in all the industries that make up the market, or they slightly underweight or overweight a sector.
Let’s take financials as an example. If the market is 20% financials, many money managers will hover around a 20% allocation to financials. If they are feeling adventurous and are particularly bullish or bearish, they may go to 22% or 18% financials in their portfolio, but they generally try to replicate the market.
To us, this is unwise. We believe financials are an unattractive group, and they may be unattractive for years. We do not want to focus our attention and resources on where there is little opportunity. Let us focus on the industries with tailwinds which can do well and thus make money for their shareholders.
TO REITERATE WHAT WE DO IN OUR PORTFOLIOS, WE FOCUS ON A FEW INDUSTRIES AND WE BUY STOCKS IN THOSE INDUSTRIES AS WE BELIEVE THAT IS HOW WE WILL PROVIDE SUPERIOR RETURNS.
These articles are for informational purposes only and are not intended to be a solicitation, offering or recommendation of any security. Guild Investment Management does not represent that the securities, products, or services discussed in this web site are suitable or appropriate for all investors. Any market analysis constitutes an opinion that may not be correct. Readers must make their own independent investment decisions.
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