Investment
Approach
While Worcester Advisors tailors its’ investment approach to meet the unique needs and timelines of each client, one principle remains constant: generate equity and/or income while preserving capital.
During the past ten years interest rates, whether U.S. Treasury Bills, Municipal Bonds, Certificates of Deposit, Corporate Bonds or longer term U. S. Treasury Bonds, have been at the lowest levels since the 1940s. Retirees have long expected to invest a portion of their retirement savings into fixed income securities during their retirement years. The low rates leave retirees with the option of exhausting their savings or investing as alternatives.
In this economic environment, as an alternative to fixed rate investment, we have enabled clients to maintain their lifestyles by investing their accounts to provide retirement cash flow from dividends and capital appreciation. Many large corporations such as Home Depot or Microsoft, with high-quality investment ratings from Standard & Poors Corporation or Moody’s Investor’s, pay dividends at rates that are considerably higher than yields offered in the bond market.
Worcester Advisors’ typically provides separate account management by structuring portfolios comprised of at least 30-100 stocks. Our approach to selecting stocks stresses high-quality models which emphasize fundamental determinations of relative value. This method normally seeks discounts in historic ratios of price to earnings as well as discounts to market trends and opportunities in earnings growth rates. Diversification is carefully tailored using index weighting, restrictions on holding size and industry sector diversification. Mutual funds, which adhere to the same philosophy of safety, screening, diversification and sector weighting, are also recommended when appropriate.
Worcester Advisors has recently developed a mutual fund model that invests opportunistically in domestic and international mutual funds that invest in stocks, bonds, floating rate securities or money markets. As with all accounts, those in the model are regularly monitored and adjusted for performance.
Worcester Advisors’ typically provides separate account management by structuring portfolios comprised of at least 30-100 stocks. Our approach to selecting stocks stresses high-quality models which emphasize fundamental determinations of relative value. This method normally seeks discounts in historic ratios of price to earnings as well as discounts to market trends and opportunities in earnings growth rates. Diversification is carefully tailored using index weighting, restrictions on holding size and industry sector diversification. Mutual funds, which adhere to the same philosophy of safety, screening, diversification and sector weighting, are also recommended when appropriate.
Worcester Advisors has recently developed a mutual fund model that invests opportunistically in domestic and international mutual funds that invest in stocks, bonds, floating rate securities or money markets. As with all accounts, those in the model are regularly monitored and adjusted for performance.
Fixed income investment emphasizes targeted maturity or duration levels that are consistent with our interest rate forecast. Maturity diversification is achieved by structuring portfolios of five or more fixed income securities. Value and safety screening relies heavily on the same quality standards which are applied to equity selection.
Through the Bloomberg Terminal, Worcester Advisors has access to professional security research and economic forecasting.
Fixed income investment emphasizes targeted maturity or duration levels that are consistent with our interest rate forecast. Maturity diversification is achieved by structuring portfolios of five or more fixed income securities. Value and safety screening relies heavily on the same quality standards which are applied to equity selection.
As a partner of Wright Investors’ Service, Worcester Advisors has access to professional security research and economic forecasting. Founded in 1960, Wright believes that over time the highest quality companies consistently create the most value. To identify these companies, Wright utilizes a screening technique that applies defined criteria to select the firms for investment with the highest ratings. Wright has a staff of 21 professionals involved in all aspects of investing $1.1 billion.
Wright has developed Large-Cap and Mid-Cap portfolio models for investors who desire to align their portfolios with either the S&P 500 or S&P 400 equity indices. We offer those portfolios on a subordinated management basis.