Managed Portfolio Investment Philosophy

Distinguishing Characteristics

Sound portfolio management often can be usefully characterized by identifying those objectives that are not pursued:

WE DO NOT BENCHMARK TO AN INDEX.

AA well-structured portfolio designed for long-term success controls for risk and volatility. If done efficiently, the portfolio earns the rates of return delivered by the markets in which it is invested. Therefore, any given rate of return is the byproduct of that effort and cannot usefully be considered a target. If we intellectually understand the theory behind this premise — or accept it as an article of faith — then we are well positioned for making sound investment decisions.

WE DO NOT ATTEMPT TO TIME THE FINANCIAL MARKETS.

Dow Wealth Management adheres to the Efficient Market Hypothesis. Respected academics have never demonstrated that anyone can successfully time the securities markets except by chance. We do not speculate in this manner and believe that it is unprofessional for investment advisors to imply that they can constructively provide such services.

WE DO NOT UTILIZE A “BUFFET” APPROACH TO INVESTING.

A common theme in many investors’ portfolios is the ownership of “some of everything.” However, for a given investor, most possible investments are not suitable or desirable and, so, should not be owned at all.

A portfolio designed to protect against irrecoverable losses with the ownership of high quality securities and also designed to optimize growth as a hedge against inflation will, by default, preclude many frequently hyped asset categories.

A DOW MANAGED PORTFOLIO DOES NOT INVEST IN PACKAGED INVESTMENT PRODUCTS — e.g., exchange traded funds (ETFs), mutual funds, deferred annuities, real estate investment trusts (REITs).

In our experience and studies, the most successful investors are not product investors, but rather they own their securities directly.

NOR DO WE INVEST IN DERIVATIVE SECURITIES.

Over time, stock options should be expected to lower investment returns and, depending on the nature of the options traded, expose the investor to heightened risks. Derivatives may be deemed appropriate only in special circumstances.

WE DO NOT CHANGE OUR UNDERLYING INVESTMENT PRINCIPLES TO FOLLOW MARKET TRENDS.

Successful investing is largely about adhering to a sound investment discipline. Although we remain highly aware of market trends, they tend not to influence our underlying investment principles.