- The Focus Portfolio -
The Focus Portfolio is the Stevanovic Metz Group's flagship investment strategy.
The Focus Portfolio is a versatile investment strategy designed to cater to a range of financial goals and risk preferences. Leaning on decades worth of combined experience in portfolio management and investment research, our team offers an actively managed portfolio that aligns with your values.
This innovative portfolio blends the strengths of four specialized investment strategies—Growth, Dividend, Value, and Fixed Income—into a single, cohesive portfolio.
Whether you're aiming for aggressive growth, seeking steady income, or remaining defensive, the Focus Portfolio can be engineered to meet your individual investment needs. By adjusting the ratio of each component, investors can enjoy a personalized investment experience that not only aligns with their unique financial aspirations but also adapts to their individual risk score that is determined through our team's exceptional financial planning process.
- The Focus Portfolio Strategy -
"Playing the piano with two hands is better than playing it with only one." - Thomas J. Dorsey
The Focus Portfolio is a unique combination of fundamental and technical analysis. Just as playing the piano with one hand can produce a melody but misses the depth of a two-handed harmony, managing a portfolio with only technical analysis or solely fundamental analysis provides an incomplete picture.
Combining both approaches is akin to a pianist using both hands: it allows for a richer, more nuanced performance. Technical analysis can reveal patterns and trends akin to a pianist's rhythm, while fundamental analysis provides the solid chords of financial health and company value. Together, they create a symphony of informed investment decisions, resonating with the full spectrum of market dynamics and company fundamentals, much like a pianist's full range of musical expression.
In short, the fundamental analysis answers the question of what to buy and the technical analysis is utilized to determine when to buy.
Our process takes into consideration both the quality of the company and whether or not the current environment is the optimal moment for initiating a position. This same process is applied when determining whether to trim or liquidate a position in the portfolio. Our data-driven system allows our team to take notice of high quality companies that are undervalued due to a downturn and low quality companies that may be occasionally surpassing market expectations.
- Portfolio Allocation Process -
Step 1 - Risk vs. Safety
The process of investing in the Focus Portfolio begins with a comprehensive financial planning process. Our financial planning team takes time to understand each client's unique goals, values, and risk tolerance, forming the cornerstone of our personalized service.
This deep dive culminates in the mutual establishment of a Safety Score - a pivotal metric that guides the initial allocation between equity and fixed income in the Focus Portfolio.
Your safety score is not something that is assigned to you by our team without your input. We believe that the relationship you have with your financial advisor should be a collaborative partnership, characterized by mutual decision-making. Your input is always valued and respected.
- RISK -
Equities embody risk through their inherent volatility. The risk is a trade-off for the opportunity to participate in the company's growth and profitability, which can lead to capital appreciation and dividends.
- SAFETY -
We take the concept of safety very seriously. Our team manages the Fixed Income Portfolio with safety as a top priority while also providing investors with a steady and predictable stream of income.
Step 2 - Safety Allocation
The safety allocation is invested in the Fixed Income Portfolio. We do not take unnecessary risks with our clients' investable assets that we have agreed should remain insulated from market risks and volatility. Instead, we prioritize a conservative approach that limits duration and inflation risks by implementing a ladder strategy.
Our Fixed Income Portfolio implements a ladder strategy and purchases individual bonds rather than utilizing bond funds which often have fees and lack transparency. A ladder strategy is a way of building a portfolio of fixed income securities with different maturity dates. For example, instead of buying one bond that matures in 10 years, you could buy 10 bonds that mature in 1, 2..., and 3 years. This way, you create a "ladder" of bonds that mature at regular intervals which reduces the impact of interest rate fluctuations on your portfolio.
Click on the link below to learn more about the Stevanovic Metz Group's Fixed Income Portfolio.
Step 3 - Risk Allocation
The risk allocation is split between Focus Growth, Focus Dividend, and Focus Value. Each individual portfolio is designed to either be invested in individually or together in a combined equity allocation.
Our model portfolio has the following allocation:
25% Focus Growth
50% Focus Dividend
25% Focus Value
The reasoning behind a core holding in the Focus Dividend portfolio, rather than evenly dividing the equity allocation into thirds, stems from its unique management strategy. Stocks that pay dividends typically yield returns comparable to the market, with the added advantage of potential income growth that enhances overall returns.
Focus Dividend is global portfolio encompassing a wide array of domestic and international companies of various market capitalizations across ten of the eleven S&P 500 sectors. Additionally, the portfolio invests in companies that demonstrate a potential to consistently pay and increase their annual dividend. This strategy creates an opportunity for investors to earn a yield that is greater than the S&P 500 while simultaneously increasing the investor's income at a rate higher than inflation.
In contrast, the Focus Growth and Focus Value portfolios are designed to potentially overperform the market. With each portfolio exhibiting a low correlation to the other, there is an increased chance for outsized risk-adjusted returns.
Past performance is not indicative of future results and diversification does not ensure a profit or protect against loss. All investments carry some level of risk, including loss of principal. While a dividend increase is generally regarded as a characteristic of a strong company, an investor should not rely on dividend payments as the primary reason for investing in the stock of a company. Additionally, dividends are not guaranteed and may be reduced, suspended, or eliminated altogether.