At GPS, our focus is on Guidance, Performance and Service. As an investment firm serving our community, we know our clients have high expectations on performance, among other things.
Our investment philosophy is centered on Risk Management, Stock Picking and Sector Rotation.
While our goal is to achieve good performance, our focus is on risk management. This is our guiding principle when it comes to investing our client's money. Diversification is a means to achieve portfolio risk management.
We are selective in our choice of stocks. Our approach is both a bottom up approach as well as a top down approach. We like companies with strong earnings growth potential that consistently exceed market expectations.
In our overall portfolio strategy, we also implement the top down approach. This approach enables us to align our portfolio weighting toward the hottest sector of the market. In normal market conditions, there are only 4 or 5 sectors that offer investment opportunities among all of the 10 sectors in the entire US market universe. Many of the market sectors rotate themselves from hot to cold and vice versa. Sector rotation is an approach that we apply to find the strongest sectors to be invested in, and identify the weakest sectors to avoid.
In sector rotation, our investment goal is to find the strongest stocks in the strongest sectors. Some of the sectors we favored last year are: Healthcare, Energy, Biotech and Technology, and more recently, Industrials and Financials.
We dynamically shift our portfolio weighting as market sectors rotate over time.