Investment Management Corporation




Investment Strategy and Portfolio Construction


Our investment management services are predicated on our belief that the most reliable methods of fundamental research are based on facts rather than forecasts.  We pay close attention to a company’s revenues, trailing earnings from operations, dividends, return on equity, and balance sheet.  To us, forecasted earnings by Wall Street are only opinions; dividends and reported operating earnings are facts.

The key to producing strong returns begins with stock selection. At Groesbeck, we use a variety of sources to conduct stock research and generate investment ideas.  Electronic research is conducted through use of the Internet, computer screening of financial databases, and a variety of websites devoted to the stock market and equity research. In addition, we use the equity research web capabilities of some Wall Street brokerage houses. We do our own homework on securities under consideration and those already owned.

In looking for investment candidates, we focus on the equity securities of companies that have the following characteristics:

  • Strong sales and earnings growth
  • Consistent annual growth trends  
  • Sound balance sheets
  • High returns on equity
  • Good long-term financial track records
  • Market leadership with growing market share
  • High trading liquidity
  • Reasonable valuations on an absolute and relative basis


Once we have found stocks that meet our investment criteria, we then build fully invested portfolios consisting of 30 to 40 stocks, diversified across a broad spectrum of industries. Positions are routinely rebalanced in order to prevent any one position from becoming top heavy. Moreover, we also trim positions as they become fully valued and seek to replace them with more moderately valued stocks.  By continually monitoring portfolios and constantly seeking new stock ideas, we create portfolios that remain vibrant.  At Groesbeck, we do not engage in any “fad” investing, short-term trading, market timing, derivatives, or short selling.


Just as stock selection and sound portfolio maintenance are necessary to achieve strong returns, a sell discipline is equally important. In monitoring our clients’ portfolios, we sell stocks that exhibit the following characteristics:

  • Slowing sales growth and earnings growth
  • Poor earnings prospects
  • Declining margins
  • Diminishing fundamentals
  • Slowing dividend growth or reduction of dividends
  • Overvaluation


In summary, our disciplined approach assures that we remain fully invested and that we seek to own quality companies whose earnings are growing and which should provide higher-than-market stock price appreciation over the long haul.  Our investment process also results in portfolios with relatively low turnover and minimal tax implications.  We remain committed to our investment process and to providing excellent client service.

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Copyright © 2002-2010 Groesbeck Investment Management Corporation, Paramus, NJ
Revised April 19, 2011