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Effective Portfolio Management: Insights and Tools to Optimize Your Investments

Join Lynn Ostrem, VP of Crow River Investment Club, for a comprehensive guide on maintaining and evaluating your investment portfolio with the NAIC principles. This presentation covers essential tools such as Pert Reports and trend analysis, offering insights on how to respond to company performance, recognize when to sell, and utilize defensive elements in your evaluation. Learn the importance of updating prices and companies, and understand trends through various financial metrics. Prepare to enhance your portfolio management skills with actionable steps and valuable resources.

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Effective Portfolio Management: Insights and Tools to Optimize Your Investments

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Presentation Transcript

  1. Introduction to the Pert Maintaining Your Portfolio Presented by Lynn Ostrem, VP Crow River Investment Club www.bivio.com/crowriver

  2. The Rule of Five No matter how diligent and conservative you may be in using the NAIC principles to evaluate your stocks: One will exceed your expectations; Three will perform about as you had expected; One will probably sink out of sight

  3. Portfolio Management Tools • Pert Report • Trend Report • Summary Report • Pert A Worksheet & Graphs • Pert B Worksheet & Graphs • Portfolio Management Guide • Challenge Tree

  4. How to Get Started… Update Prices… …with just a click! Update Companies… Last month, we reviewed updating companies. Either refer to that presentation or click on File|Update Companies in Toolkit. If you use OPS, it updates them automatically.

  5. How to Get Started… Review your judgments… …based on any news or information you have gathered.

  6. Pert: Defensive Elements (Portfolio Evaluation and Review Technique)

  7. Pert: Defensive Elements Use the Estimated Earnings for Comparison

  8. Pert: Defensive Elements Sales should be the most stable.

  9. Pert: Defensive Elements Pre-Tax Profit is next important

  10. Pert: Defensive Elements Finally, look at earnings

  11. Analyzing Problems(see notes)

  12. The Value Side

  13. Caution... The worse a company performs… ... the better the value will look. • Sales, EPS, PTP and Trailing 4 Qtrs measure quality. • Change your expectations in the Stock Selection Guide whenever performance falters. • People will not pay much for it,P/E will go down, Upside/Downside Ratio will go up, and Relative Value will look better. It will look great if you don’t lower your expectations!

  14. When to Sell NAIC says…NEVER SELL . . . unless the company: • Has had an adverse management change. • Has declining profit margins. • Has had a deteriorating corporate financial condition. • Has been beset by effective competition. • Has relied on a single product that is becoming obsolete. • Has changed for the worse due to economic conditions. • Has proven to be cyclical. • Has upset the balance by company size in your portfolio.

  15. COLORS ON THE PERT

  16. The Portfolio Trend Report

  17. Using PERT Worksheet - A 9 yrs of quarterly Sales, Pre-tax Profit, and Earnings Trailing 4 Quarters Makes it easy to see quarterly trends.

  18. PERT Worksheet A Graphs Graphs: • Sales • Earnings • Pre-tax Profit • % Pre-tax Profit on Sales by • Trailing 4 Quarters • Quarterly With various growth lines for comparison.

  19. Portfolio Summary Report Shopping List with “Buy” and “Sell” recommendations. Use 25 / 50 / 25 Zoning!

  20. QUESTIONS? Next month’s assignment: Read the Portfolio Management Workshop Import our stocks into your Toolkit Update prices & companies next month Bring the Pert Report to the meeting

  21. This best way to review this presentation is by printing the Notes option

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