The four cornerstones of our investment approach are:
Equity Emphasis, Value Investing, Long-Term Outlook, and Flexible Active Management.

Equity Emphasis
We feel the best way for most investors to build long-term wealth is to maintain a large portion of their net worth in equities (stocks). U.S. equities, as well as the equities of most free countries, have proven to be the superior choice for long-term investors. Stocks, as an asset class with an average annual return of about 10% per year over the last century, have outperformed corporate and government bonds, gold, real estate (if not leveraged), CDs, and savings accounts. Stocks ultimately follow corporate profits, and we experienced substantial economic growth during the past century – and this growth should continue. Stocks are shares of ownership in business enterprises, and when free people are unhindered and allowed to improve their lives then they will continue to create, build, progress, and grow.
We recognize that even though stocks have outperformed other asset classes over the long-term, they are also riskier and more volatile than other asset classes. Adding some fixed income securities and/or investment choices from other asset classes can enhance the stability and diversification of a portfolio, and can smooth out investment performance.

Value Investing
At Bon Investments, we consider
ourselves to be “value investors.” We believe the majority of the world’s most successful investors (e.g. Warren Buffett, John Templeton, Peter Lynch) have also adopted this approach to investing.
We appraise companies on a fundamental basis, looking to buy those that are significantly undervalued in relation to their intrinsic or “true worth”. Our preference is to find those companies with the fastest sustainable growth at the lowest possible valuations. Oftentimes these companies will have low valuations because they are overlooked, ignored, or temporarily out-of-favor. To take advantage of these opportunities it is important to think independently and to be willing to go against conventional wisdom.

Long-Term Outlook
The importance of having a long-term outlook dovetails nicely with value investing because patience is essential for a value investor. It can take many years for an undervalued stock to “play out” and properly adjust to a more rational valuation level. It takes many years to build wealth as well. It is the compounding of those attractive average annual returns (stocks have averaged about 10% / year historically)

that can build great wealth over the long-term.  Holding stocks for the long-term also helps smooth out the volatility inherent with the stock market, so your own returns are then more likely to resemble the excellent historical average returns.

Flexible Active Management
In an ever-changing world, it is important to adjust to changing circumstances. Many financial advisors believe that maintaining one standard portfolio allocation for all seasons, and only changing that allocation to be more conservative as a client ages, is the best way to manage money. We believe there is still no substitute for thoughtful and informed decision-making, and we believe in taking action for client portfolios based on our assessment of the investment trends.
We typically keep client portfolios fully-invested, but we may on occasion raise large cash positions or employ hedging strategies in order to position portfolios differently. The investment landscape tends to change gradually, so we usually make portfolio allocation changes in an incremental manner. We’re prepared to make any portfolio adjustments that we feel will lead to superior investment results for our clients.