There are numerous investment approaches available for long-term growth. Some aim for lower volatility and accept lower returns — about 5% annually. Others embrace market indexes, which historically return ~10% but come with volatility.

A typical low-volatility approach incurs costs that eat into returns. A 5% portfolio return with 5% in fees and opportunity costs is not ideal. Index investing provides better return prospects, but we find that even index construction can be inefficient — much like a grocery cart filled with too much soda and candy.

Our preferred approach has been developed and refined over 18 years. It starts with the S&P 1500 and filters out poor candidates. We only select securities with well-above-average Safety, Quality, Value, and projected Growth above 15%. The portfolio is concentrated and cost-effective, though volatility remains.

At 15% returns, compounding works fast — 1,000% growth takes 17 years. The catch? Discipline, patience, and resilience through inevitable market corrections.

Sincerely,

Katz Family Financial