Growth of Income Strategy

GROWTH OF INCOME STRATEGY

Our philosophy toward growth of income investing is to seek above-market portfolio returns through investment in securities of companies that our analysis indicates have the ability to increase earnings and dividends at a faster rate than their industry group and/or the stock market. We construct diversified portfolios of stocks that include both growth and income characteristics. The inclusion of high-yielding growth equity issues allows us to invest in growth-oriented stocks at lower dividend yields and still obtain an overall portfolio income yield that is well above that of the general stock market. In addition, this process leads to dividend income growth that is faster than that of corporate dividend growth in general and is significantly faster than the consumer price inflation rate.

We start with higher-than-market yield and stress growth of portfolio income at a rate faster than that of the market averages. Portfolio income growth is accomplished in two ways. First, we select companies that should experience relatively rapid dividend growth rates and target companies that we believe will increase dividends every year. Second, we augment this growing stream of income by periodically switching from lower yielding equities to higher yielding issues in order to raise the portfolio income level. In this manner, we can increase the income while also moving from relatively overvalued (lower yield) to relatively undervalued (higher yield) issues.

At Groesbeck, you will find us to be client friendly, flexible and devoted to our investment discipline. We work closely with our clients, understand their investment objectives, and strive to produce results which exceed their expectations.