Philosophy & Process

Philosophy

At Elemental Capital Management, we believe that superior investment returns are achievable over time. We also believe that the best way to achieve those results is by investing with a high degree of confidence in a small selection of securities, rather than buying 100 stocks just for the sake of diversification. In addition, we believe in evaluating a variety of asset classes, sectors, and industries to discover the most attractive investment opportunities.

Process

Before we make any investment recommendations, we meet with each prospective client to determine their willingness and ability to take risk; their investment objectives; time horizon; liquidity needs; and a variety of other criteria. By designing a clear and concise investment policy statement from the outset, we aim to establish an unambiguous road map for success that can serve as a guiding point of reference for all parties to revisit over time. Our investment process begins with a macroeconomic analysis of the global economy. This “top down” analysis drives 20% of our investment process. We consider interest rates, fiscal policies, commodity prices and other variables.

Equity Investment Process

Elemental’s equity selection process begins with a proprietary model designed to help us discover companies that we believe are worthy of investment. Factors we consider before investing on behalf of our clients include: growth, profitability, cash flow, industry dynamics, and valuation.

Fixed Income Investment Process

Fixed income investments will be selected to meet each client’s cash flow needs and/or to provide necessary portfolio diversification, depending on the client’s investment policy statement. Taxable accounts may invest in municipal securities.