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Growth and Income Investing

Investments

Investments

SFE provides professional services with a personal touch, striving to maximize client returns by adhering to a straight-forward and consistent approach to investing that is anchored by appropriate risk parameters for each client. Founded in 1977, from the start SFE has been delivering sound investment management advice to generations of clients. As a fee-based fiduciary, we make a firm commitment that in all circumstances, your best interest comes first. Each portfolio is customized to your specific needs and goals. Strong relationships and individualized personal attention characterize our approach to serving every client. We are counselors, a phone call away at any time, and always prepared to answer your questions on any financial topic. As our client, our entire team—advisors, analysts, and support staff—works together to guide you and help you achieve meaningful results at every stage of your financial life.

What is Growth Investing?

Growth investing is an approach that focuses on tapping into the growth of companies and industrial sectors that are rapidly rising with the intent to produce long-term capital appreciation for the investor. The opportunity to outperform the market is a common objective of growth investing. Typically, the targeted investments are stocks of companies that are positioned for above average profitability and expansion that will provide a higher-than-average rate of return. The expectation is that you would hold these investments for several years at least.

Characteristics of Growth Stocks

Characteristics of Growth Stocks

Growth stocks can be new companies, especially in emerging technologies and industries. These may be small cap stocks, companies in the initial phase of growth with the potential for capital appreciation. Prices of these stocks are generally high, expensive to buy and to hold, and often they do not pay dividends. For both of these reasons, these investments are better suited to investors with the ability to tolerate risk and the patience to hold the investments across a long time horizon.

Predominantly though, our growth holdings represent experienced businesses already generating substantial profits and, in many cases, providing dividend growth.  Wisely choosing a growth investment requires an understanding of the company’s business model and potential ability to generate profits over the long run. Experienced and confident management teams typically establish and grow their dividends once reaching sustainable profitability.

Growth versus Value Investing

Growth investing and value investing both share the same goal of seeking high total return appreciation. The strategies followed to achieve this goal, however, are opposite. Value investors search out stocks that are underpriced, trading at prices below their intrinsic worth, with the anticipation of gain as the stock price rises as the market value is recognized. Growth investing, on the other hand, is based on searching out the promising companies that have the potential to grow even further.

What is Income Investing?

What is Income Investing?

Income investing involves structuring a portfolio to generate a steady stream of income on a regular basis. This could take the form of dividends, interest, or bond payments and may serve as a supplement to other sources of fixed income. Government bonds, income stocks, common or preferred, corporate bonds, real estate, and mutual funds could all be part of a portfolio that is structured around the best income investments. In addition, investments selected for their income generating potential over time may also appreciate in value.

As compared to growth investing, income stocks generally have lower volatility and lower risk than growth stocks.

Growth and Income Investing with SFE Investment Counsel Inc.

Time, discipline, and risk management are important to achieving long term success in an increasingly complex world. Investing is a marathon activity, not a sprint. SFE Investment Counsel Inc. exists to provide personalized advice to help you reach your investing goals.

As a portfolio manager, SFE invests in established, dependable companies that demonstrate several characteristics in common. Selected companies usually offer competitive advantages that derive from technological, research and management excellence. Companies typically show five or more years of demonstrated revenue and cash flow growth; and return cash to investors through dividends or other payouts. Our investment team pays close attention to evaluating the management of these companies as well, concentrating on finding those companies that have long-term sustainable business models along with transparent and intelligent communications with investors.

As fiduciaries, we maintain the highest level of objectivity and integrity throughout. We have a solid portfolio management process in place and a long record of success as an investment team. We are proud to note that we have been hired to manage the portfolios for other financial firms. Our investment claims are supported by compliance with GIPS® reporting standards.

To view performance, click here:

All-Cap Core Growth & Income

To learn more about our Socially Responsible Equity Strategy, click here:

Pathways (SRI) All-Cap

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