Edgemoor Investment Advisors


The first step in developing an investment portfolio is to choose the appropriate asset allocation, the percentage of funds that are held in equities and the percentage held in income investments. Asset allocation is a fundamental decision in investing and affects both the total return that a portfolio is likely to achieve and the volatility of the portfolio. At Edgemoor Investment Advisors, we work closely with each client to develop and implement a tailored asset allocation strategy based upon the client’s specific situation and investment goals. After establishing a portfolio, we regularly rebalance the holdings to maintain the appropriate allocation.

Edgemoor Investment Advisors employs a value-oriented approach to equity selection that seeks to maximize returns while reducing the risk in each portfolio. We typically invest the equity portion of each client’s portfolio in a diversified group of 30-35 U.S. and international stocks. We analyze the fundamentals of stocks and buy those that are trading below our estimate of their intrinsic value, an approach that has outperformed the market over the long term. More specifically, we seek to identify companies exhibiting some or all of the following criteria:

In an effort to minimize taxes and transaction fees, we typically hold stocks for many years. Our approach to equity selection and long-term focus further the goals of capital preservation and capital appreciation.

Our income universe is not limited to government and corporate bonds but also includes utilities, REITs, and other high dividend stocks; preferred stocks; master limited partnerships; income trusts; and senior corporate notes. The selection of income-generation investments varies depending upon the specific circumstances of each client, including his or her risk tolerance, age, desire for income and investment time horizon.

The opinions expressed herein are those of Edgemoor Investment Advisors, Inc. (Edgemoor) and are subject to change without notice. Past performance is not a guarantee or indicator of future results. This material is not financial advice or an offer to sell any product. You should not assume that any of the securities transactions, sectors or holdings discussed in this report are or will be profitable, or that recommendations Edgemoor makes in the future will be profitable or equal the performance of the securities listed in this report. Edgemoor reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Edgemoor Investment Advisors, Inc. is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Edgemoor including our investment strategies, fees and objectives can be found in our ADV Part 2, which is available upon request.