A combination of depth, experience, discipline, insightful decision-making and quality investment choices enables strong and steady growth.

The implementation of our approach is achieved through a thorough study of all factors that impact the investment policy for each portfolio. This analysis leads to strategic decisions regarding the allocation of assets for each account. In this continuing process, we make pragmatic choices for our client portfolios between cash, investment grade bonds and equities.

EQUITY INVESTING

At Gillespie, Robinson & Grimm, the equity investment process is carried out by the principals, who jointly determine strategy and security selection. Our portfolios typically own approximately 25 stocks, concentrated in industries with attractive growth characteristics and valuations. Turnover of portfolio holdings tends to be below average, except at times when we are making major moves into or out of the stock market because of overall value considerations or investment climate judgments. We view ourselves as long-term investors rather than traders.

We emphasize traditional methods of fundamental security analysis. Our firm has access to a wide variety of outside research sources. We also receive verbal inputs from security analysts, economists, brokers and consultants and we interview company managements to confirm our work. A limited number of equities meet our standards, so we are able to concentrate our efforts on outstanding companies with excellent prospects.

We seek to invest in companies with the following characteristics:

• Above-average or accelerating growth in earnings
• Consistently high returns on equity and on total capital
• Strong balance sheets and conservative accounting practices
• High-quality, reliable management teams
• "Value-added" products or services

We will invest in a company with these characteristics when the valuation is attractive relative to the company’s fundamentals. Ample marketability of the stock is also an important consideration for potential investment.

FIXED INCOME INVESTING

We believe that maturity is the primary determinant of investment results in fixed income portfolios. Our management activities are concentrated on shifting maturities in anticipation of important changes in interest rates. As with our equity approach, we do not attempt to forecast short-term moves in the fixed income markets.

Our process places a great deal of emphasis on economic analysis and inflation forecasting. We study trends in fiscal and monetary policy, as well as supply/demand factors in the capital markets. Although we monitor the interest rate forecasts of outside observers, we develop our own internal projections in creating fixed income strategy.