As a financial advisor, it is imperative for me to gain a comprehensive understanding of my clients in order to establish trust.  My investment philosophy involves five themes that guide us in the process of establishing a long-term relationship based on mutual trust.

1. Structuring a diversified investment allocation ought to reflect an investor’s “emotional fortitude, relative to overall market volatility!

• Comfort with some degree of market volatility – or the lack of comfort – is one of the most important aspects in building a long-term plan.
• Investors tend to want to “make money” while “not losing any principal” in the process.
• However markets are volatile…
• Of utmost importance: A portfolio allocation ought to take into consideration each investor’s “emotional fortitude” toward volatility, thus mitigating the risk of emotional decision-making.

2. Invest for ‘Normalized’ Markets, Economy, and Gross Domestic Product (GDP).

• As a financial advisor during the 1987 market crash, I thought no one would ever buy stocks again.  
• I was wrong.  It turned out to be a wonderful buying opportunity, as the economy maintained its trend growth rate thereafter.
• The same proved to be the case after the 1999-2002 tech sell-off – and after the 2008 Lehman Brothers financial crisis.
• That’s when my “normalized investing thesis” took hold as the economy and markets regained their long-term growth trends began one of the longest economic period of growth in post-war history. 
• However, “Normalized Times” are always slightly different and therefore requires adjustments – hence the emergence of “new normal times.”

3. Invest for Total Return – a combination of Income + Growth – with consideration towards lengthy retirement years.

• U.S. population longevity has never been greater, and in general, women outlive men five years, especially in more affluent communities where healthcare is more readily accessible.
• Generally, it is important to have growth as a greater proportion of the equity portfolio.  
• However, the size of its allocation does depend upon many issues, including the emotional fortitude of the investor, his/her age, and other factors.  
• As such, returns ought to be measured on a total return basis – that is: Income + Growth = Total Return.

4. Invest in companies with free cash flow (FCF).

• Companies that have a history of exhibiting strong FCF tend to have higher margins, stronger balance sheets, lower capital expenditures, and greater returns to investors.
• These companies also tend to increase their dividends at a greater rate and buy back their own stock as an additional way to return capital to investors.
• This provides investors with a larger “slice” of the company “pie,” or a greater percent ownership of the company.

5. Gain exposure to: Global Health Sciences and Global Technology – BUT with consideration to higher volatility these sectors provide.

• These two sectors of the market are critical components of a ‘growth’ and ‘total-return’ portfolio.
• Demographics and Technology are in the midst of secular growth trends which will continue for years to come - providing investors with higher returns over time.  
• These sectors also provide strong FCF.
• Global technology includes: software, semiconductor and sensors, internet marketing and retail, media and social networking, specialized technology facilities as a part of Real Estate Investment Trusts (REITS).
• “Future” technology, such as autonomous transport, drone delivery, and artificial intelligence, industrial 3-D printing, and “deep/machine learning” – self-programming computers.
• Global health sciences include pharmaceutical and biotechnology stocks, along with healthcare equipment, digital health technology, including artificial intelligence diagnostics, managed care, life science tools (CRISR), and health facilities and services for our global aging demographic.
• These two sectors have a history of providing strong underlying fundamentals, multiple macro tail winds, and attractive risk/reward characteristics.