Core Investment Philosophy
Our team at Armstrong Advisory Group focuses on developing portfolios with the objective of achieving long-term growth of capital while customizing the asset allocation depending upon each client’s risk tolerance. In striving for this objective, our team invests in equity and fixed income securities that we feel are undervalued at the time of purchase. We place an emphasis on viewing ownership of an equity or fixed income security as ownership of a piece of a business. Accordingly, we attempt to thoroughly understand the aspects of each business in which we invest through studying their annual reports and financial statements along with other industry data. Following an examination of the earnings, cash flow and balance sheet, we then estimate the fair value of each company. A purchase of the business will only occur if the equity or fixed income security is trading at a discount to our calculated fair value.
Similar to Warren Buffett’s mentor, Benjamin Graham, we believe the market is a short term voting machine and a long term weighing machine. As a result we search for companies from a long-term perspective with a desire for businesses with demonstrated histories of stable earnings growth. Ideally, an investment would have a “moat” – or sustainable competitive advantage(s) – that will drive continued positive long-term earnings. Frequently, we favor best-of-breed companies that have generated, and in our estimation will continue to generate, free cash flow to the firm over an upcoming multiyear horizon.
Overall, this long term, value investing focus has other benefits too, such as typically resulting in less frequent trading in our client portfolios. This reduced portfolio turnover saves substantially on often overlooked transaction costs that weigh down portfolio values over long term periods. Furthermore, a smaller, less revolving model allows the research team to more fully concentrate efforts on understanding the investments of our clients and the macroeconomic impacts of the market as a whole on client portfolio value.
Meet our Research Team