Our specialty is investments. It’s how we create the most value for clients, it’s what we do best, and it’s what we enjoy the most.
We realize that your investment portfolio is the culmination of a lifetime of hard work, sacrifice and risk taking, and we take that responsibility seriously. Your portfolio is also the key to reaching your financial goals, so we closely manage our clients’ portfolios. The process begins with a written investment policy statement that spells out how your portfolio will be managed and invested.
Our investment style is cautious, skeptical, contrarian, patient and disciplined. Since we don’t know what the future will bring, we favor a Permanent Portfolio approach that consists of roughly equal weightings in four major yet diverse asset classes, at least one of which should perform well no matter what happens. Historically, such an “all weather” portfolio has produced a competitive long-term average annual return with rare (and small) annual losses. The low volatility of such a portfolio allows retired investors to enjoy a higher quarterly draw from their portfolio since they never have to sell an investment after it has suffered a significant loss. Slow and steady wins the race.
For the individual stocks portion of the portfolio, we have developed over many years a proprietary quantitative scoring system that synthesizes a number of data points that we believe drive investment performance over the long term. Such a quantitative process allows us to remove our emotions from the investment decision-making process and remain disciplined. Our “black box” considers consecutive years of dividend increases, a dividend safety score, composite scores for quality, value and growth, insider ownership, investor sentiment, short sellers, visibility, size and corporate governance. Each stock earns an overall score that helps us determine which stocks to favor and which to avoid.
For international stocks, we follow a strategy of investing in the ten cheapest stock markets in the world and avoiding the ten most expensive, which has resulted in above average returns with below average volatility over the long term. Using single country ETFs also allows us to maximize tax efficiency.
Our investment approach is informed by the fact that the federal government faces unfunded liabilities with a present value of over $202 trillion, so we favor real assets (such as companies with a history of increasing their dividends every year, real estate and precious metals) that can at least maintain their value no matter how many dollars the Federal Reserve prints. We believe that, as Voltaire observed in the 1700s, all fiat currency eventually reverts to its intrinsic value: zero.
We never have custody of any client funds. Compass Advisors LLC is a registered investment adviser.