Our singular focus is to help you meet your financial goals
Riverplace Capital is registered with the Securities and Exchange Commission (SEC) as a Registered Investment Adviser (RIA). To be registered with the SEC as an RIA, firms like ours must actively manage more than $120 million in assets annually and serve as a fiduciary, where we act in the best interest of the client. Our singular focus is to help you meet your financial goals.
There are two types of investing, growth and value. The object in both cases is to provide superior return to the market averages.
Growth Investing is the approach we take at Riverplace Capital. This involves the identification of companies that are likely to grow their revenues and earnings faster than the economy (made up of all businesses) at large. These companies’ market values reflect that growth by increasing faster than other firms. Great growth companies outperform their peers for long periods of time. Therefore, true growth investing tends to require low portfolio turnover (purchase and sales).
Value investing, on the other hand, seeks to find undervalued stocks. Under valuation generally occurs when the underlying assets are worth more than is being reflected in the stock price. (Perhaps the earnings of a company are quite cyclical, so when earnings are at a low point, the company’s value does not reflect the potential if conditions improve.) If values are recognized and fully reflected, the investment should be sold and reapplied to another undervalued situation. How quickly the market recognizes the value miscalculation determines turnover. Value investing, therefore, generally has a higher rate of turnover than does growth investing.
Obviously, there is plenty of gray area in these definitions; periodically the same company can be classified under both definitions. Also, some professional growth investment managers have high turnover and some value managers have low turnover. High turnover in a growth portfolio usually reflects poor selections or disguises a trading strategy merely using more volatile growth names. Low turnover for a value manager can also reflect poor selections, where either the value is not there to be recognized or is taking too long to be reflected.
Studies have shown that over the long term, both styles produce almost identical results, so for most investors, this factor does not matter much. However, the one style often performs best when the other is performing poorly so some portfolios are constructed using both styles to reduce near term volatility by having one style that is working in each year. Again, over a longer period of time, little difference is observed.
The more important factor for solid long-term investing is the quality of the manager. Because all of the studies cited are based on averages, having a manager who performs above the relevant index is the paramount factor to any long-term investment strategy. Riverplace Capital Management has demonstrated the ability to outperform the averages and have been consistent in our approach.
Riverplace Capital offers free financial planning to all clients. We believe strongly in the value of planning as it helps document goals and objectives, and provides a benchmark to measure progress. Planning helps us provide better, more targeted financial service to you. Lets start working together on your financial plan today.