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Back to About Us More About Us Princeton Value Highlights
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Methodology At Princeton Value Advisors, our first step is to personally get to know you, your current financial situation and your timeline for achieving your goals. We manage your portfolio with these goals foremost in mind and in concert with your other assets, maximizing the potential and safety of the whole. One of the foundations of our approach is that no one can predict the future. There are circumstances under which even supposedly "safe" assets will perform poorly. Thus, we emphasize diversification so that no one risk will keep you from achieving success. Once we know you, your goals and your risk tolerance, our next step is to determine the mix of asset types that will best meet your needs. This step is very important because the types and level of risk one is taking is frequently determined by the types of assets one owns, and their relative amounts. Within each type of asset, we look for specific investments that meet your goals, time frame, and level of risk tolerance. The result is typically a portfolio that contains a mix of cash (such as money market funds), fixed income investments (such as bonds and annuities), and stocks. The ratios of each asset type, however, vary greatly from client to client. Once the initial portfolio has been created, we will meet with you regularly by phone or in person to monitor your outcomes and make adjustments to both your asset allocation and the investments in your portfolio. If the changes in your personal circumstances become significant enough, Princeton Value Advisors may advise a revision of both the plan and the asset allocation. The part of your assets allocated to common stock investments will typically be divided between low-cost mutual funds/ETFs and direct ownership of common stocks in specific companies. The ratio will depend on your risk tolerance and our ability to find suitable individual stocks. For the part of your assets allocated to direct ownership of common stocks, Princeton Value Advisors (PVA) uses the highly successful stock selection methodology developed by PVA's Senior Financial Advisor, David Wertz, Ph.D. (See the web page with his 2000 - 2008 stock picks for details.) Stock Selection Methodology Dr. Wertz has achieved phenomenal success as a stock investor by rigorously following a value investing approach based on investment fundamentals. Most investors, including most mutual fund managers and financial advisors, are not value investors. They buy a stock because they think its price will go up. This approach amounts to betting your savings on the irrational ups and downs of the stock market. This is folly in any market. This approach is especially risky today. Dr. Wertz doesn't attempt to predict stock prices. He buys a stock only if its future dividends alone will provide a great return. Not only the profit but recovery of the stock's purchase price must come from analyst enables him to estimate a stock's future dividends and convert this into a value for the stock. He buys a stock only if its price is well below its value. The 32% annual return of the average stock purchased by Dr. Wertz from 2000 - 2008 shows the effectiveness of this method. Dr. Wertz's stock selection process has 4 steps.
After stock in a company is purchased the performance of both the company and its stock are monitored. A stock is sold only if the company's business performs significantly worse that expected or if the price of the stock rises to the point where the stock is no longer likely to provide a superior return. Conversely, more shares might be purchased if the company's business performs better than expected or the stock price declines substantially with no change in the company's prospects. Call (609) 683-8005 today for a no-obligation, complimentary consultation about creating or updating your investment strategy. |