67 WALL STREET, New York - October 10, 2013 - The Wall Street Transcript has just published its current Investing Strategies Report. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Long-Term Investing - Value Investing - Investment Strategies
Companies include: Exxon Mobil Corp. (XOM), Johnson & Johnson (JNJ), Merck & Co. Inc. (MRK), Procter & Gamble Co. (PG), Altria Group Inc. (MO), AT&T, Inc. (T) and many others.
In the following excerpt from the Investing Strategies Report, an expert money manager discusses his investment philosophy and top picks:
TWST: Please start with a brief history of Advance Capital Management and an overview of your business today.
Mr. Kostiz: The company was started in 1986 by three gentlemen who were executives in the Bell system and managed the corporate pension account. When they started the company, they thought they would manage pension money since they had contacts and experience. They quickly realized that without assets or a real track record it was tough. At the same time, the Bell system was getting rid of people, essentially they were offering early retirement packages to get people out of the door. With their contacts in the Bell system, a lot of people started calling up, asking for advice on whether to take the offer and how to manage the money if they do. The business took a different turn because of this, and 27 years later what we have is a very robust financial planning and retirement planning company with our own investment management team.
Currently, we have a little over 5,000 clients. We have assets of about $2.2 billion, of which $1.5 billion are discretionary assets. And we're quite unique in that we have our own family of mutual funds called the Advance Capital I funds. We started the funds back in 1987 because we had a certain style that we wanted to utilize for our clients. There were a limited number of funds in 1987, and many of the strategies were not exactly what we were looking for. So we started our own family of funds and they're still available to clients. We have about $0.5 billion in that line, and we have about $1 billion in our discretionary line, which we started about four and a half years ago.
When the market came under a lot of pressure in the credit crisis of 2008 and 2009, a lot of our clients were in nondiscretionary portfolios. If we wanted to make a change to their account, we had to call and discuss it with them. When the credit crisis hit with the Lehman collapse, we wanted to get clients to reduce their risk, so essentially we had to call a lot of our clients. That taught us a pretty good lesson - that we wanted to have more control, and clients wanted us to have more control over their accounts. As a result of this learning experience, we started a discretionary line for clients. We now have a traditional line and a discretionary line.
TWST: What would you add in terms of characterizing the firm's overall investment philosophy and strategy?
Mr. Kostiz: We take a fairly diversified approach to client assets. We call it hitting singles and doubles. We're not swinging for the fences, we're just trying to make good decisions for client accounts, both in our own funds and, in the discretionary line, we look for managers with a long tenure, with a strategy that we can understand and clients can understand. Further, we look for ones that stick to their process and produce solid results over time. In our own funds, we take the same philosophy - diversified approach. We look for companies, depending on what fund we're talking about, that have a consistent approach to managing their business, good results in a business that we can understand long term. We are a bit more on the conservative side longer term, but I think that works out and has worked out very well for clients over time...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
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