At Baldwin, we believe that a comprehensive stock selection process, employing quantitative, qualitative and technical methodologies, creates superior investment performance over the long term.
Recognizing that an appropriate asset allocation plan significantly influences investment performance, we initially meet with our clients to understand their risk sensitivity, as well as their current and future goals and circumstances. We then structure an asset allocation plan that fulfills our clients’ needs and desires. While cash and high-quality bonds are included in most asset allocation strategies, we believe that stocks will outperform fixed income investments over the long run.
Our stock selection process combines the best of three methodologies: our proprietary quantitative stock selection model, our qualitative stock research database and our technical chart guidance.
Baldwin’s proprietary quantitative stock selection model identifies global companies that exhibit superior price and earnings growth patterns, with a lesser but significant focus on price- earnings and price-to-sales attributes. We begin with a universe of over 800 stocks, applying our formula to each in order to assign decile rankings. The stocks favored in the rankings have performed extremely well to date.
“our stock selection process combines the best of three methodologies”
From the stock universe, we select and maintain the Baldwin Working List which includes approximately 150 stocks. Consistently high rankings and appropriate sector representation are two key criteria in the compilation and maintenance of the Baldwin Working List. Our portfolio managers meet frequently to discuss the relative growth potential of each stock sector. Larger stock positions or a greater number of stocks are purchased within sectors with strong growth prospects, while smaller positions or fewer stocks are chosen within less favored sectors.
In addition, we maintain a comprehensive stock research database. Each portfolio manager focuses on one or more equity sectors, such as Technology or Health Care, taking responsibility for understanding the companies and their stories. Their qualitative opinions, culled from a wide diversity of Wall Street and independent sources, are regularly added to the stock research database and support Working and Select list decisions.
Our technical approach consists of reviewing a variety of technical price charts for companies within our stock universe. These charts may serve as early warning indicators for companies poised to out- or under- perform the market. We also recognize that these images can assist us in our timing of stock purchases and sales and further enhance investment performance.