Our Investment Philosophy
Our Philosophy
How We Grow Your Wealth
Parrish Capital’s overarching philosophy hinges on cash flow planning around our “liquidity window” standard. We believe assets that are needed for consumption within a window of 3 to 5 years should be invested in liquid, high quality fixed income securities that mature around the time of that need.
By keeping funds needed in at least the next three years safe and liquid you reduce the need to sell growth assets in adverse markets, which ultimately could prevent you from reaching your goals. Liquidity window funding is continuous and thus reallocation of funds from fixed to growth occurs as needed and according to market conditions.
“Delayed gratification, long-term risk taking and checking your emotions are the keys to creating a financial legacy."
Teddy Parrish, Parrish Capital
Standard Research Process
Parrish Capital’s investment philosophy is based on fundamental analysis anchored by our Standard Research Process (SRP) which serves as the cornerstone of investment selections and portfolio construction.
The core of this process rests on our belief that after sector allocation, earnings power, forecasted earnings growth, and changes to market assumptions surrounding both dictate near and long term equity price performance.
Portfolio positions are established with the vision of holding each position long term with one small business cycle as the base. We buy predominately high quality companies with B+ or better for Financial Strength as measured by Value Line and with earnings growth plus dividend of at least 12%.
Companies meeting our core parameters make up the select group of which we build our proprietary portfolios namely Parrish Core Growth and Parrish Income Portfolios.
We recommend investing the growth portion of your portfolio in a combination of Parrish Capital’s Core Growth and Income portfolios. The dynamics of this blended portfolio includes a dividend above the current market rate, a maximum individual size of 5%, maximum single sector exposure of 25%, portfolio turnover rate of 30% or less, and valuation metrics below the market or the industry for each portfolio position.
For the lower risk fixed income portion of your portfolio we recommend the purchase of only high quality instruments. The primary fixed income instruments consists of short to immediate term BBB+ or better corporates, municipals, CD’s, and occasionally ETFs and bond funds. We also maintain at least 5% cash in the money market.