What is Longbow’s approach to equity investing?
Our equity selection process is deeply rooted in academic finance, specifically Modern Portfolio Theory. We employ portfolio optimization – a mathematical technique – to form efficient portfolios. An efficient portfolio maximizes the benefits (return) and simultaneously minimizes the consequences (risk). Clearly, each is related and neither should be viewed in isolation. Risk and return must be measured on an aggregate basis and controlled at the portfolio, not security, level.
