Long-term investing success can be achieved through an array of investment strategies and philosophies. However, most successful investors would agree that following one specific approach provides the most reward. At Denewiler Capital Management, we have found that a values-based approach to investing through fundamental analysis adds degrees of predictability and consistency that are often hard to find in volatile markets. Our philosophy has been molded by decades of academic research and over 40 years of investing experience. Experience has shown that attempting to “time the market” or make short-term “plays” influenced by market events increases our managed portfolio’s risk to a level that we are uncomfortable with. Instead, we seek a long-term investment horizon of roughly 10 years, which effectively nullifies the daily noise of popular or misguided investing trends.
Our firm manages equity, fixed income, and balanced accounts. The entirety of the management process is centered on fostering positive client relationships that allow the firm to work in tandem with the client to set clear objectives and expectations. We set target allocations based on each client’s unique risk-return profile and reconsider them when life events occur or our client’s goals change. Our aim is to develop a personalized relationship with each client, effectively working as a team to determine what the best steps forward are for each individual situation.
The heart of our strategy lies in growing dividend income by investing in companies that are growing their dividend. The baseline thesis for this strategy comes from the fact that of the S&P 500, dividends have grown by 6% since 1939 and half of the market’s returns has come directly from dividends. We subscribe to the notion that US GDP over the long term will increase, and the companies that drive this increase are at the core of the S&P 500. As GDP grows, company earnings grow, which allows companies to payout more returns to investors through dividends. By focusing on dividends, the risk associated with market downturns can be mitigated through dividend income that boosts investment returns.
Fixed Income Philosophy
Most of our accounts contain some allocation of fixed income investments, and we offer separate account fixed income portfolio management. The focus is on three areas: interest rate risk, credit quality, and client liquidity demand. Each area has its own unique circumstances and challenges; however, all three can be combined to form a comprehensive portfolio designed to meet a client’s return objective and risk tolerance.