Strategy & Risk Management

Strategy

After 20 years of combined experience working at Drexel Burnam Lambert and Donaldson Lufkin Jenrette, Mark Johnson founded Growth Strategies in 2000 to capitalize on opportunities in the growth stock sector. Our portfolios are managed for performance, optimized for tax efficiency and can offer less volatility than is normally associated with that asset class. We invest primarily in equity and equity related securities that are traded publicly in domestic markets. The majority of the portfolios are invested in the common stock of companies, that in the portfolio manager’s judgement, exhibit accelerating fundamentals. This is frequently due to something new about the company; new products, services or management. Often these companies operate in industries that also show accelerating characteristics.

We use a bottom-up stock picking style that selects individual securities to purchase in anticipation of higher valuations.

A smaller percentage of the managed assets may be invested in turnaround companies where there is a catalyst for strong improvement.

Managed accounts generally expect to hold a relatively concentrated investment portfolio of up to 10-20 positions. Growth Strategies principal believes that its sell disciplines offer a better hedge against risk than diversifying into less compelling stocks.

Risk Management

Growth Strategies only invests in a stock if it believes that the downside risk of any single investment can be defined so that possible losses are less material to the accounts’ overall value. For each investment, the manager attempts to predetermine the amount we are willing to risk at the time of the investment and strictly adhere to this determination.

These sell disciplines also serve to allocate account assets out of stocks into cash in poor market environments. As a reminder of the oft repeated risk in the stock market, the average growth fund dropped over 50% during the period from early 2000 through 2002 and then did it again in 2008 through 2009. Unlike growth mutual funds, which generally stay fully invested at all times, these processes can help serve to protect clients’ assets from the full effects of large draw downs in market declines.

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