Investment Objective & Strategy



The investment objective is to compose a portfolio for the client using high quality growth and value companies and Exchange Traded Funds (“ETFs”) in order to achieve the financial goals of our clients. The principal goal is to locate high quality and undervalued securities that the market has overlooked. Investments will consist of U.S. and international common and preferred shares of equity securities, ADRs, ETFs, and cash/cash equivalents. Sectors, asset types, and sizes will not be weighted to a predefined goal. We have more of a concentrated portfolio than the typical advisor. For our stock portfolios we typically invest in 15 to 25 names and five to ten ETFs for the client wanting broad diversification with an ETF portfolio. Merrell Brothers, LLC will explore domestic and foreign markets for both value and growth opportunities in various sectors of the economy. If Merrell Brothers, LLC cannot find any investments discounted enough to buy, then portfolios may hold cash or an S&P 500 ETF until securities are priced lower. In addition, Merrell Brothers, LLC will explore the markets for both value and growth opportunities in all the different sectors of the economy. Depending on the client’s risk tolerance, Merrell Brothers will adjust the clients’ exposure to certain securities on a case by case basis.

Individual Stock Portfolio
The Merrell Brothers, LLC Investment Management team offers a portfolio of investments in individual stocks. Our investment objective is to create a portfolio of undervalued securities that contain high quality companies for our clients that achieves meaningful long-term growth. Merrell Brothers, LLC aims to follow several of Warren Buffett, Charlie Munger (Buffett’s right hand man), and Benjamin Graham’s (the father of value investing) core investment principals. These potentially include finding investments that maintain a corporate moat, durable competitive advantage, high return on equity (“ROE”), minimal or no debt, high cash and cash equivalent balances, low capital expenditures, and high free cash flows. We also like to invest in stocks that pay dividends that we can reinvest in new companies.

Exchange Traded Funds (“ETF”) Portfolio
ETFs enable investors to invest in specific sectors, market segments, asset classes, countries, or definite regions. ETFs trade just like stocks and ETFs can hold stocks, bonds, and commodities. In addition, ETFs provide investors with instant diversification, a tax efficient vehicle, and usually a lower expense ratio. In our opinion, ETFs offer investors a better return than a mutual or hedge fund because of the diversification, lower fees, and reduced portfolio churn. ETFs typically outperform and on average have 60% lower fees than their mutual fund counterparts.

Merrell Brothers, LLC believes that not all ETFs are created equal and our goal is to find a basket of superior ETFs that suit our clients. We constantly monitor, value, and research ETFs that will benefit your portfolio. The ETF investments we make for you will depend on several personal factors including age, risk tolerance, and years until retirement. We aim to invest in a basket of five to ten ETFs for the clients. Our team personalizes each portfolio allocation based on the needs, goals, wealth, and risk tolerance of each client. The Merrell Brothers are offering three portfolio options including an all individual stock, all ETFs, and a combination of individual stocks and ETFs.

Combination Of Individual Stocks And ETFs
We can create a blended portfolio of individual stocks and ETFs if the client wants exposure to both investments. We will select from our best individual stocks and ETFs to try to provide a balanced portfolio.

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