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Investment Philosophy

Foldes Financial Management is an active and passive global investment manager delivering consistent long-term performance through uniquely constructed asset allocation portfolios. Foldes Financial Management believes that successful investing is defined by helping our clients determine and meet their investment objectives. Our research based investment philosophy is founded on four key principles:

• Asset Allocation including Alternative Investments
• Portfolio Structure
• Use of Specialist Manager`s
• Continuous Portfolio Management

We believe that the application of this philosophy will add value by enhancing returns and reducing risk, thereby increasing the likelihood of our clients achieving their goals.

Asset Allocation including Alternative Investments

Asset Allocation is the central theme of the Foldes Financial Management investment philosophy and the dominant factor in determining total portfolio return. Studies have shown that asset allocation decisions account for more than 90% of the variation of total returns. Therefore, the overwhelming determinant of the success of an investment strategy is not which securities or mutual funds were bought and sold, but how the assets were divided among the various asset classes.

Portfolio Structure

The stock and bond markets are composed of numerous styles and sectors. (i.e. large cap growth, small cap value, government bonds, corporate bonds, etc) To access the return potential of the financial markets and reduce risk, a portfolio must be diversified within each asset class as well.

This is one of the major areas of Foldes Financial Managements` research focus with carefully designed strategies for the domestic equity market, the international equity market and the fixed income market.

Specialist Money Managers

To implement these asset management strategies, Foldes Financial Management utilizes a global network of specialist managers who invest in distinct sectors of the markets. Specialists, who adhere to a distinct investment discipline, such as large company growth managers, have an opportunity to hone their approach and to anticipate changes within their area of the market. This focus provides the opportunity for greater consistency and predictability of results. The use of specialist managers is consistent with our view on diversification across and within asset classes. Selecting experts in the various sectors and styles ensure full coverage of the market. This coverage ensures that the targeted allocation to stocks, bonds, and cash is being maintained.

Continuous Portfolio Management

Portfolio management is a continuous process. Once needs are defined, a plan developed and a strategy implemented, an ongoing confirmation and re-evaluation takes place. There are two critical components of this process. First, each portfolio is rebalanced regularly (being sensitive to tax implications) to assure that the mix of assets defined to achieve goals is constantly in place. Rebalancing reduces risk and keeps the investment plan on the right course. Second, we constantly "rehire" the managers in our global network. Each manager is continually monitored and is subject to replacement should they fail to achieve stated goals or deviate from their stated philosophy or process.