OUR PROCESS
FINANCIAL PLANNING
Principles of Good Stewardship
Financial planning is about being a good steward of your resources. Making prudent decisions with saving, spending, borrowing, investing, preparing for the future and passing your wealth to the next generation.
Good stewardship involves defining your goals and taking the right action today to achieve them. It requires patience and discipline. Additionally, we should at all times conduct ourselves in a moral and principled way, and financial decisions are no exception. This extends to the following areas:
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Cash Flow & Budgeting
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Retirement, Education and Goal Planning
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Investment Planning
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Risk Management
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Tax Planning
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Estate Planning
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Charitable Giving
The 6-Step Planning Process
INVESTMENT PROCESS
We implement a three-stage evaluation process when considering securities for investment:
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1. Business Analysis
The first question we ask ourselves is do we like the business? We examine all the ways a company generates revenue. A good business should do something, or make something that is moral, good and useful for society. A good investment will have favourable tailwinds to future success. We take the long-term view of the business owner. If we wouldn't want to own the entire business, then we don't want to own a single share.
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2. Financial Analysis
We assess every business on their ability to generate cash flow for investors, to pay dividends, to maintain profitability and returns on invested capital. We assess balance sheet risk: the amount of debt a company carries, liquidity, and capital structure. We look at a company's long-term track record as prelude to future results.
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3. Valuation Analysis
Finally, any business needs to be valued appropriately. Taking a realistic and reasonable assumption of future growth, calculating the present value of a company's future cash flows, we want to invest in companies at a discount to our estimate of intrinsic value.
PORTFOLIO PROCESS
Keeping pace with inflation, generating income, opportunities for growth, mitigating risk... a portfolio has a lot to accomplish.
We advocate broad diversification among a range of asset classes - and keeping an even balance - as the most prudent process of building an investment portfolio. We prefer real things in addition to successful businesses, and so our portfolios include allocations to the following:
Precious Metals
Infrastructure
Commodities
Preferred Shares
Real Estate
Safe-Haven Assets