Types of Accounts

Focused Equity

For Clients Seeking Long-Term Capital Appreciation in a Globally Diversified Portfolio of High Quality Equities

McIntyre, Freedman & Flynn has established a solid long-term record, managing portfolios of high quality equities. We carefully select companies based on quality of management, financial strength, competitive advantages and attractive future prospects. The approach is traditional and fundamental. Portfolios are invested in well-established, publicly traded businesses not just pieces of paper.

Our Focused Equity Portfolio is internationally diversified in established markets and normally 100% in equities. The objective is long-term capital appreciation with no more than reasonable business risks. While equity markets can be volatile we believe that focusing on the underlying business reduces risk in the long run.

The equities in our Focused Equity Portfolios are high quality stocks of blue chip companies in both the U.S. and overseas. McIntyre, Freedman & Flynn does take account of market risks but is not a market timer. Trading in an established portfolio is generally low. McIntyre, Freedman & Flynn buys stocks with the objective of holding for the long-term, two years or longer.

The Portfolio

At all times we follow 40 to 50 companies intensely.  For each of our clients, we construct a separate, concentrated portfolio holding from 20–25 stock positions based on what companies we think offer the best value at the time of the initial investment.  Each stock will represent 3½ - 4% of your portfolio. Over time, naturally, these percentages will fluctuate as some stocks rise and others fall.

You will hold a portfolio that is exclusively yours.  We do not run a model portfolio, or use a formula to manage an individual account.  Each new account is invested only as we find the stocks that we like at the price that we like. 

Individually managed accounts offer more flexibility than pooled accounts, such as mutual funds, especially at tax time.  Individual decisions can be made regarding tax loss or gain selling should the need arise.  And unlike mutual funds, you are able to exercise more control over the timing of distributions.

Dividend Opportunity Strategy 

Thirty years ago, dividends mattered. Back then, the average stock dividend was yielding around 5%. Since then, dividend yields have declined. For 2008 the average dividend on the five hundred stocks that make up the S& P 500 index was around 2.97%. In 2009, that number dipped to less than 2%.

 What happened? For a variety of reasons investors became less interested in dividends, and increasingly focused on capital gains. Likewise, companies were less interested in paying dividends to shareholders, and found what they thought were better uses for their cash. Dividends were neglected and even derided by investors during the roaring 1990’s. The time-tested concept of “Total Return,” appreciation plus dividends, fell out of favor with many investors.

 Now investors face new issues. Many growth stocks have stopped growing in the past decade and are not instituting paying out dividends. Banks and money market funds are currently paying out anemic interest rates to clients. Because of this, we believe that there exists an excellent opportunity to purchase the stocks of high-grade, well-managed companies with yields that are exceptionally high in today’s low interest rate environment.

The Portfolio

Assets in each account are invested in equity stocks in up to thirty-five different companies. The companies are diversified throughout many industries, including utilities, pharmaceuticals, construction, consumer products, financials, chemicals, and telecommunications, etc.   In some cases ETFs (exchange traded funds) may be employed for further diversification.

We buy solid, blue chip companies we believe are undervalued, with a long and consistent history of paying dividends, and in many cases increasing their dividends 

Total Return

Many professionals call this approach a Total Return Strategy.  We manage the accounts for high dividends, moderate appreciation and lower volatility than the general market. In a flat or falling stock market, dividend-paying stocks usually have better total returns than those paying no dividends. In addition to the income they generate, high yielding stocks tend to have better price appreciation and shallower declines in such market conditions. 

Dividends Mean Discipline

The discipline of having to pay regular cash dividends to shareholders is a hard taskmaster for businesses. Real cash flow and earnings are necessary to maintain and increase dividend payments. Since dividends are real cash, you can't fake them for very long. A dividend is the best evidence of a company's financial health. At a time when investors are skeptical of the revenue and earnings that corporations are reporting, regular dividends can give them confidence in the companies in which they invest.

We think that sums up the advantages of our Focused Equity Strategy and Dividend Opportunity Strategy.   Both Strategies are suitable for accounts with a long-term horizon of three to five years, such as IRA’s, profit sharing or pensions as well as individual and joint accounts or trusts.

It is important to recognize that equity markets can be volatile and involve market risk.  Stocks even in solid, growing businesses can, for no fundamental reason, fluctuate through a wide range.  It is therefore important to be comfortable with an equity portfolio especially during down markets.  To offset volatility, we invest with diversification, dividends and a patient long-term horizon.