Equities
Define Goals
Clearly articulate the financial goals, risk tolerance, and investment horizon of the portfolio.
Investment Strategy
Decide on a growth, value, income, or a blend approach based on the objectives.
Top Down Research
Macro-Economic Analysis
Global and Regional Trends: Analyze global economic indicators, interest rates, inflation trends, and geopolitical risks to understand the macroeconomic environment.
Market Sentiment: Gauge market sentiment and trends, which can affect stock performance in the short term.
Sector and Industry Analysis
Sector Selection: Identify sectors with potential for growth or value based on macroeconomic analysis, technological changes, regulatory shifts, and other factors.
Industry Deep Dive: Within selected sectors, we perform a deep dive into industries to understand competitive dynamics, market size, and growth prospects.
Bottom-Up Research
Valuation Analysis
Valuation Models: Use various valuation methods such as Price/Earnings (P/E) ratio, Price/Book (P/B) ratio, Discounted Cash Flow (DCF), and Dividend Discount Model (DDM) to estimate the intrinsic value of a stock.
Comparative Analysis: Compare the company’s valuation metrics with its historical averages, its peers, and industry benchmarks to assess relative valuation.
Company Analysis
Financial Health: Analyze a company's financial statements, focusing on revenue growth, profitability margins, debt levels, cash flow, and return on equity.
Business Model and Competitive Advantage: Evaluate the company's business model, market position, product offerings, and its competitive moat.
Management and Governance: Assess the quality of the company’s management team and governance practices.
Portfolio Construction
Selection Criteria: Select stocks that meet the investment criteria based on the comprehensive analysis conducted in the previous steps.
Portfolio Construction: Determine the weight of each stock in the portfolio based on its expected return, risk profile, and correlation with other investments to achieve diversification.
Monitoring and Rebalancing
Performance Tracking: Regularly monitor the performance of individual stocks and the overall portfolio, comparing them against benchmarks and adjusting expectations based on new information.
Rebalancing: Adjust the portfolio composition based on performance, changing market conditions, and shifts in economic outlook. This may involve buying or selling assets to maintain the desired level of diversification and alignment with the investment strategy.
