Investment Methodology

Changes in economic conditions cause the prices and potential returns of the capital markets of stocks, bonds and cash to vary greatly over time.  Therefore, we argue that a strategic (static) portfolio mix is far less than optimal.  In addition, investors have different investment objectives.  Their appetite for risk also varies widely.  Even so, the investment process employed by Sheets Smith Investment Management can accommodate these differences allowing different investors to participate in the benefits of this dynamic asset allocation philosophy.  SSIM uses the same investment methodology for all of our tactical asset allocation balanced portfolio solutions. That does not mean all portfolios are the same.  SSIM has a range of portfolio structures to accommodate different levels of client risk.  The exposure to stocks varies to accommodate each client. The difference between accounts with different risk tolerances is managed through the asset allocation process, not through stock selection. In other words, the difference among the portfolios is not which stock is owned in the account, but how much of a particular stock is held in a given portfolio. The dynamic asset allocation is determined by forward-looking relative value analysis of stocks, bonds and cash on a risk-adjusted basis.  The asset mix varies as the market prices and potential returns of these capital asset change, and they vary constantly.  Concurrently, our portfolio managers continually search for securities with superior price appreciation potential unconstrained by sector weighting or equity capitalizations. Over the economic cycle, portfolios will include both “growth” and “value” shares as well as companies across all market capitalizations. Portfolio holdings are highly diversified across sectors, industries and capitalizations selected for their growth potential and relative valuations. Seeking competitive returns while preserving capital in times of market disruptions remains the utmost investment goal at Sheets Smith Investment Management.