INVESTMENT STRATEGIES
Westwood Asset Management opened its doors in 2005 capitalizing on the strong history of its partners. Meet the partners, examine the strategies and returns - we will work for you to reduce the burden of managing your financial assets. Financial growth simplified means that you accomplish more and work less. We begin with an examination of your individual situation and goals to find the right investments for you.
All too often investors try managing their portfolios themselves, this leads to added responsibilities, stress and usually under performance.
If your assets are currently invested elsewhere, compare and examine the performance of your advisor, broker or mutual fund. Most investors are unaware of the fact that the majority of actively managed stock mutual funds under perform the market. The returns can fall further when examined on a tax adjusted basis. The same can be said of many money managers and brokers. Investors need to be aware of the comparative performance of their accounts. Westwood will objectively review your current accounts, professionally.
Westwood employs a number of different strategies to manage client portfolios. Investment plans incorporate realistic assumptions and your personal goals. Westwood normally seeks to overweight stocks, bonds and funds that are undervalued.
Stocks
Stocks are comprised of a number of categories: Growth, big cap, small cap, preferred etc. Westwood normally searches for the best values in all categories and establishes positions for portfolios.
Q: How do you determine the value of a share of stock?
First, a determination of a value, for the entire company is established. This doesn’t need to be exact. For instance we could say that a company is worth between $600 and 800 million dollars. Then we would then subtract all of the borrowings, or debt obligations, to arrive at an "equity value." This value is then divided by the amount of shares in existence for the company to arrive at a per share value. Often-times this value can be affected by many other factors, including growth or future earnings per share valuations.
Bonds
Bonds are also comprised of many different categories; Convertible, secured, government etc.; they also usually have a rating from an independent ratings agency. This gives an independent opinion on the safety of the bond or the creditworthiness of the issuer. Bonds usually fall into two ratings categories: investment grade and non-investment grade. Westwood normally seeks to attain higher yields and bigger gains by investing in non-investment grade and convertible bonds.
Q: How are bonds different from stock?
A bond is a contract to lend money, at an interest rate, which is to be repaid at a certain date. Bonds can trade up or down based on the perceived credit-worthiness of the issuer or changes in interest rates.
Funds
Funds are a wider category than stocks or bonds and include: closed end, open end stock, bond, money market etc.
Q: How and when does Westwood use funds to manage portfolios?
Westwood will normally eschew open ended funds because of the inability to control taxable events, additional management fees and the fact that most actively managed funds generally under-perform the market over longer periods. Westwood utilizes money market funds to attain higher interest rates on cash in the short term. Closed end funds that are higher yielding or discounted to the net asset value of the fund, can also result in gains. Westwood buys funds in order to attain higher income or capital gain.
