Our investment management process begins by crafting an investment plan for each client based on their risk tolerance, time horizon, and goals. While each portfolio will include multiple asset classes (stocks, bonds, real estate, etc.), the guiding principle that is evident throughout is that we are value investors. Whether investing in stocks, bonds, real estate, or any other asset class, our focus is on the underlying performance of the investment and whether it is worth the current asking price. As value investors, we are focused on quality investments that perform well over time. Therefore, we measure our performance against long-term results and do not allow short-term market trends to change the fundamental principles of our strategy.
Everyone has heard the saying “buy low and sell high;” however it is easier said than done. When markets are high, most people are filled with optimism and expectations that markets will continue to perform well going forward. On the other hand, when markets falter, there is typically a reason for the decline and many people will predict that the market will crash and that recovery is a distant prospect. To buy low and sell high requires the ability to separate fact from fiction and make choices that are independent of the crowd.
At Prairiewood we focus on the underlying value of the investment rather than the general sentiment of the markets. Maintaining this strategy requires an understanding that the best time to buy is often when everyone else is frantically trying to sell, and the best time to sell is when everyone else is frantically trying to buy. The irrationality and overreaction of the markets can often continue for extended periods of time before the true value of an investment is reflected. As Ben Graham, a value investing icon, said “In the short run the market is a voting machine, but in the long run it is a weighing machine.” Over time the true value of an investment will be reflected, however waiting for that to occur takes patience. At Prairiewood, we require that all of our clients understand the nature of our strategy and the fact that there will likely be periods of under-performance as we wait for securities to reflect their true value.
Everyone has heard the saying “buy low and sell high;” however it is easier said than done. When markets are high, most people are filled with optimism and expectations that markets will continue to perform well going forward. On the other hand, when markets falter, there is typically a reason for the decline and many people will predict that the market will crash and that recovery is a distant prospect. To buy low and sell high requires the ability to separate fact from fiction and make choices that are independent of the crowd.
At Prairiewood we focus on the underlying value of the investment rather than the general sentiment of the markets. Maintaining this strategy requires an understanding that the best time to buy is often when everyone else is frantically trying to sell, and the best time to sell is when everyone else is frantically trying to buy. The irrationality and overreaction of the markets can often continue for extended periods of time before the true value of an investment is reflected. As Ben Graham, a value investing icon, said “In the short run the market is a voting machine, but in the long run it is a weighing machine.” Over time the true value of an investment will be reflected, however waiting for that to occur takes patience. At Prairiewood, we require that all of our clients understand the nature of our strategy and the fact that there will likely be periods of under-performance as we wait for securities to reflect their true value.