INVESTING FOR SUCCESS
STARTS WITH
CLARITY



 
 

It's nice to know your investments are working as hard as they can — the Investing With Clarity™ Process provides our clients with personalized active money management needed to help them reach their unique goals.

 
 
 

Investing With Clarity™ is our unique portfolio management and investment process… it's been providing investors with clarity in both their investments and their investment strategy for over 20 years.

 

 

 
 
 
 

INVESTING WITH CLARITY™ PORTFOLIO CONSTRUCTION

 

Helping clients reach their goals is our top priority. Our excellence in portfolio construction is based on our disciplined process, which is rooted in our proven investment Philosophy, Strategy, Flexibility and Transparency™. We call them the Four Keys to Investing for Success.

PORTFOLIO CONSTRUCTION
 
 

PHILOSOPHY

Clarity, observation and discernment are the core of our investment philosophy. At Nepsis, we invest in quality, undervalued companies with an unhindered vigilance and adherence to our investment plan. We highly leverage two powerful investment tools - volatility and Strategic Cost Averaging™. Diversification is essential, but over-diversification can equally dilute a portfolio’s ability to grow over time. Our equity selections are primarily rooted in risk-adjusted return.

Our investment philosophy encompasses the following evaluation criteria:

  • Invest in companies over time, not the "stock market"
  • Diversification, not over-diversification
  • Long-Term Trends
  • Dividends
  • Follow companies, not benchmarks

STRATEGY

We invest in companies and industries, not in the stock market. This perspective allows us to capitalize on market pullbacks due to other investors’ fear or greed-based investing. Our strategy looks to increase our positions in companies with strong fundamentals and attractive growth opportunities. Fundamental investment principles and analysis drive our strategy. We do not attempt to time the market, but rather invest in strong companies over time. To accomplish this, we utilize Strategic Cost Averaging™ and portfolio rebalancing on a continual basis.

Our portfolio construction approach is based on clear fundamentals:

  • Extensive market research
  • Top-down and bottom-up analysis
  • Portfolios construction of 25 to 35 companies
  • Invest in secular and cyclical trends
  • Initial investment maximum of 5% in any one company
  • Hedging portfolio holdings when appropriate
  • Utilize a global allocation

FLEXIBILITY

Through vigilance and an adherence to our philosophy and strategy, we gain the flexibility needed to buy more of the companies we want to own when they go “on sale.” This flexibility permits us to respond to uncertainty and market opportunities in a timely and cost-effective manner. Our proactive portfolio management allows for adjustments based on unforeseen changes in the economy and/or with the businesses we own.

TRANSPARENCY

Our clients understand what they own and why they own it. It sounds simple, but most investors lack clarity in these basic investment facts. We help our clients understand the quality of their assets, helping to increase their confidence and gain further clarity in their investments. We believe it is the investment clarity that allows investors to "stick to the knitting" during stock market volatility. Additionally, our clients have the ability to closely monitor their own portfolios. Nepsis does not house any assets and does not serve as a custodian of any securities.

 
ACTIVE MONEY MANAGEMENT
 

ACTIVE MONEY MANAGEMENT

 

We provide a straightforward and sensible process to money management; seeking to own solid, well-run companies that appear to provide ample return potential. Through Strategic Cost Averaging™, we continue to invest in these companies over time as opportunities arise due to market inefficiencies. It’s simple, rock-solid thinking backed by in-depth research and disciplined execution best practices.

 
 

PRE-PURCHASE ANALYSIS

Experience and dedication to industry knowledge drives our approach to pre-purchase analysis of potential growth sectors and companies of interest. We closely examine the companies we are interested in through bottom-up analysis, assessing the fundamentals, determining those with the greatest potential value and looking at the growth potential of the overall marketplace or sector.

Dividends make a difference. Companies that pay a dividend offer the advantage of a greater potential return through reinvesting in the portfolio. Dividends are an indicator of a company’s financial health and can account for a significant portion of investment gains. The book (Triumph of the Optimists: 101 Years of Global Investment Returns, Princeton University Press [2002]) analyzed equity returns from capital gains and dividends between 1900 and 2000. The findings showed that market-oriented portfolios with dividends reinvested would have returned nearly 85 times the wealth of the same portfolio relying solely on capital gains.

POST-PURCHASE ANALYSIS

Once we buy into a company, we continue to purchase through Strategic Cost Averaging™, provided the company continues to comply with our original selection criteria. Once a company meets our top-threshold price or no longer meets its original criteria, we exit our position and pursue other investment opportunities with greater growth potential.

STRATEGIC COST AVERAGING™

As many of our clients know, we are very active in the management of client portfolios. This active management includes the continual buying and selling of a small amount of shares in one’s portfolio – we call this Strategic Cost Averaging™ (SCA).

Our SCA process is something we believe is very unique and important to our portfolio management strategy. It allows complete flexibility in the management of your portfolio. This flexibility is extremely important to the long-term success of investing. SCA provides us the ability to be continually investing in great businesses over time while simultaneously providing us flexibility to sell a portion of a business under our Sell Discipline.

SELL DISCIPLINE

A portfolio has a lot of moving parts. Every position in our portfolios is owned for a specific reason. Equally, when positions or companies we own are sold, it is also foe specific reasons. Due to the way our portfolios are structured, there is not any one position that will make or break a portfolio and its long-term performance. We continuously monitor markets and valuations of our current companies, as well as new opportunities that are available.

We have four sell disciplines that we adhere to in our investment process:

  • Selling a company when the long-term fundamentals are in jeopardy or have changed.
  • Selling a part of a position to lock in profits to raise cash for other opportunities or cash needs.
  • Selling a weaker company in favor of a stronger, less expensive company. This happens most frequently during market corrections or corrections within a sector or sectors.
  • Selling positions to take a loss to offset future gains. This is called Tax-Loss Harvesting.

GLOSSARY OF TERMS

Strategic Cost Averaging™ into Positions: Because the stock market is often driven by fear and greed, it provides us with an ongoing opportunity to Strategic Cost Average™ into companies we want to own. We look forward to market corrections and pullbacks because they provide opportunities to buy more of the companies we want to own when they are on sale.

Rebalancing Portfolios: We continually monitor and assess the fundamentals and valuations of the current companies we own. Rebalancing is the process of realigning the weightings of a portfolio of assets. Rebalancing involves periodically buying or selling assets in a portfolio to maintain an original desired level of asset allocation. It is important to both Strategic Cost Average™ into companies we want to own and dollar cost average out of companies to lock in gains and maintain allocations.

Ongoing Hedging: When appropriate, we will hold cash in portfolios and monitor the companies we own and the strength of the overall economy. We then evaluate the situation and adjust accordingly. Additionally, because we believe in investing in companies, not the “stock market,” we may use hedging techniques that enable us to continue to hold onto companies we want to own, despite what may be perceived as short-term negative influences affecting the company price.

Diversification: Studies have shown that a portfolio of 20 to 40 companies is an appropriately diversified portfolio. The benefits of diversification are significantly reduced once a portfolio has over 40 companies in the portfolio. We have patience when looking for entry points into new positions and continuing to Strategic Cost Average™ into the companies we currently own.

 
 

OUR PORTFOLIOS

 

We offer five core strategies ranging from Growth to Income, as well as two U.S. Only portfolio strategies, allowing advisors who use a multiple manager and portfolio strategy process to harness the strength of our investment Philosophy, Strategy, Flexibility and Transparency™.

OUR PORTFOLIOS
 
 
TAX-EFFICIENT INVESTING
 

TAX-EFFICIENT INVESTING

 

Many clients look to us for tax-efficient investment strategies. From reducing tax consequences at retirement to understanding how instruments distribute capital gains throughout the year to proper asset allocation and smart rebalancing, we have the experience to provide clients with insight and guidance.

 
 
 

SPECIALIZED PROFESSIONAL SERVICES

 

If your unique investment and long-term goals require specialized insights from industry experts, we can help. Our national network of leading legal professionals and CPAs specialize in practice areas such as living trusts, legacy planning, charitable giving, endowments and others.

PROFESSIONAL SERVICES
 
 
CORPORATE RETIREMENT PLAN SOLUTIONS
 

CORPORATE RETIREMENT PLAN SOLUTIONS

 

A well-constructed and well-managed retirement plan can translate into a productive and loyal workforce, as well as retain and attract the brightest and best employees. We can help you make sure your firm has a plan in place that is designed to best meet your employees' needs, as well as fulfills your fiduciary responsibilities.

 
 

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