Sell Discipline

Selecting stocks to place in clients’ portfolios is an essential component of our investing process. But knowing when to sell a company is equally important. We dedicate as much time and resources to analyzing our existing holdings as we do potential holdings. After all, companies within the portfolio remain just as dynamic as those that are not held in the portfolio. Maintaining a stringent sell discipline helps us limit downside risk for our investors.

We initially establish target buy and sell prices for each security, but fundamental shifts in a company’s financial situation may cause us to adjust those targets. We typically will sell a holding if any of the following conditions occur:

• The stock reaches its target price and there is no compelling reason for us to adjust that target.
• We could better use the money elsewhere.
• The stock’s fundamentals deteriorate or the thesis we used to buy the stock materially changes.
• The company's market capitalization exceeds the limits of our investment mandate.
• The holding becomes too large a percentage of the overall portfolio.