Tuesday, November 30, 2010

Lockbox Investing: Actively Monitoring Performance

There has been the misperception that WFG's "lockbox" investing approach is a passive strategy where after conducting research on companies to invest in, we purchase our top picks, put them in the "lockbox" and throw the key away.

While we believe that the stocks of companies we purchase can be held for the long-run, we still actively monitor their performance. WFG will use the key to the "lockbox" to add or remove companies based on stock valuations and our economic outlook. For example, during 2008 as oil was on its way to $147 per barrel, we removed many of the energy names from the "lockbox." In the early part of 2009, we added most of those positions back into the "lockbox," as the price of oil fell and the stocks once again became attractively priced.

WFG will continue to actively monitor all the positions we are invested in and make changes as market and economic conditions change.

Investing Lesson: Buy and hold is not the same as buy and ignore.

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