OUR APPROACH

The world today can be chaotic, confusing and noisy. There are not enough information to rely on for influencing wise decisions and too much information from unreliable sources.
Volume goes up, reason goes down, and action becomes inconsistent, or worse, paralysis sets in.

With more than 30 years of experience, we have lived and managed through the minefields of the markets.

Experience has taught us discipline. From discipline comes principles and from principles: a process.

PENCE PRINCIPLES

1. Principles are non-negotiable: They help set the foundations for strong and lasting personal relationships. We often serve multiple generations of the same families as we share the same principles.

2. They don’t care what you know until they know you care: Every team member is the embodiment of this principle. It is one of the absolute screening criteria to join our firm. You can’t teach caring, it is a character trait, and it comes from a servant’s heart. Our team members are loyal and long term, some have been with us for decades. They are committed to providing outstanding service to our clients; it is part of their nature.

3. If you fail to plan, you plan to fail: Our Wealth Management Process is planning based. Our trained and professional financial planners take the time to help you understand fully the challenges, opportunities, and options before you. Most importantly, they focus on the necessity of knowing where you are now, where you need to go, and when you need to be there. These components, integrated with a detailed analysis of your risk tolerance allow us to establish your “PWM Personal Index”. It is focused on delivering the right amount of cash flow with the appropriate amount of risk.

4. Human behavior drives consumption: Our investment analysis methodology is built around a keen analysis of human behavior and how it translates into economic activity. By focusing on human behavior we can better learn the key demand economic drivers and identify the companies that could benefit from them.

5. Cash flow trumps volatility: Markets will be volatile, but our clients’ portfolios are built to focus on generating cash flow so that clients may take advantage of volatility rather than be victims of it. Our goal is to let our clients be able to feel the confidence of the cash flow generated rather than the stress of worrying about their daily balances.

Please keep in mind, no strategy assures success or protects against loss. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.

PENCE PROCESS

1. Look for Big Knowable Themes: Today there are big knowable themes occurring in the world. Some are long-term, others shorter. They drive behavior and global consumption. Whether itis understanding global demographic growth or central bankpolicy, these big knowable themes provide either the tailwind orthe headwind that affect economies, earnings and portfolios.

2. Identify Choke Points™: As we analyze the big knowable themes,we look for places where there is a choke point™ in the processor the effect. These choke points™ then provide opportunities for typically just a few companies.

3. Target “Best of Class”: When we look at the companies at the choke point™, we analyze who we believe has a competitive advantage; which company is best able to translate the big knowable theme and dominance at the choke point™ into pricing power. Pricing power may become excess earnings and excess earnings can potentially translate into either higher dividends or higher growth or both.

4. Capture Cash Flow: This is tied directly to our principle of “Cash Flow Trumps Volatility.” The companies that generate the most positive free cash flow are better positioned to distribute that cash to its owners, namely us. We then use active management strategies to try to enhance yields.

5. Seek to Manage Risk: Markets are volatile; the world is now more interconnected than ever. From time to time this globalization may increase risk rather than decreases it. Over the long run, risk must be managed. So we focus on the principle of “To make profits you have to take profits, and take losses while they are relatively small, don’t wait for them to grow”. First, we concentrate on finding the right companies, and then we focus on the right prices to buy and sell. We think that buy and hold no longer works in today’s world. We have to actively manage the accounts in order to help protect our clients’ assets. We help manage the risk so you can be more confident about your wealth.

6. Focus on the Personal Index: We are a planning-based firm. Therefore, each client has a financial advisor who helps define goals, creates a plan and monitors success. In this process, we help determine our clients’ PWM Personal Index. It is based on how much cash flow is necessary to pursue the objectives with the appropriate amount of risk. We develop strategies which are personal and clearly focused on understanding both the fears and aspirations of our individual clients not on what return number we publish to our peers. We do not focus on trying to beat the S&P 500. The S&P 500 is not our client. YOU ARE.

Please keep in mind, no strategy assures success or protects against loss. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.