Schultz Financial Mgmt Corp

Risk-Controlled Portfolios for Serious Investors

Core Bonds

Core - High Quality Bonds 

This investment style is uniquely managed for each investor.  It invests primarily in individual investment grade bonds or bonds deemed to be worthy of an investment grade rating.  When purchasing a bond, consideration is given to credit risk, yield, maturity, income needs, and tax implications.  By owning multiple individual bonds rather than a bond fund, we can realize a full return of principal by holding the bonds to maturity, regardless of interest rate fluctuations.  Depending on market conditions, we may invest in treasury inflation protected bonds ("TIPs"), government agency bonds, corporate bonds, or tax free municipal bonds.  The objective of this investment style is to add stability to an investor's overall portfolio and provide income as needed.

Short Term Bonds

This investment style is uniquely managed for each investor.  It invests primarily in short term corporate bonds with maturities less than five years with consideration given to credit risk, yield, and income needs.  By owning individual bonds rather than bond funds, we can receive a full return of principal by holding the bonds to maturity.  The objective of this investment style is to diversify and add stability to the investor's overall portfolio and provide attractive income.

Trend Following Bonds

Trend Following - Bond Funds

This investment style normally invest in one or more high yield corporate bond mutual funds.  If a down trend develops in high yield corporate bonds, this investment style will switch to a US money market fund or other fixed income fund that has a favorable trend.  This investment style will typically invest in mutual funds, but may also invest in exchange traded funds (ETFs).  The objective of this investment style is to outperform the Barclay Aggregate Bond Index and preserve capital during periods of bond market declines.

Core Stocks

Three fourths of this investment style is normally invested in 15-20 dividend paying consumer staples stocks in order to provide steady income and reasonable stability throughout a full stock market cycle.  Stocks are purchased on weakness (oversold) and sold on strength (overbought).  The remaining one fourth of this investment style will be invested an exchange traded fund  or money market fund, depending on market conditions.  When the overall market is in a strong upward trend, a leveraged ETF that tracks the Russell 1000 (x3) may be used.  During sideways or down trending markets a more conservative consumer staples ETF or fixed income ETF may be used.  During severe market conditions, a portion of this investment style may invest in an inverse ETF that may be used to partially hedge against declines in the stocks held.  The objective of this investment style is to outperform the Dow Jones Industrial Average during favorable market conditions, and have less downside risk during market declines.  

During normal market conditions, this investment style will typically hold 25-30 large and mid cap stocks that are included in the Russell 1000 index.  Stocks are acquired or sold based upon a quantitative model using several fundamental and technical factors.  In addition to near optimal diversification, market risk is somewhat controlled because only upward trending stocks are purchased if and when the overall market (as determined by the S&P 500) is in both a short term and intermediate term upward trend.  When the trend of an individual stock turns downward, it is sold.  As a result, cash levels may increase as individual stocks are sold, but not immediately replaced.  The objective of this investment style is to outperform the S&P 500 Index during favorable market conditions and preserve capital during market declines. 

Trending Following Stocks

During normal market conditions, this investment style will typically hold 25-30 large and mid cap stocks that are included in the Russell 1000 index.  Stocks are acquired or sold based upon a quantitative model using several fundamental and technical factors.  In addition to near optimal diversification, market risk is controlled in two ways.  First, only upward trending stocks are purchased if and when the overall market (as determined by the S&P 500) is in both a short term and intermediate term upward trend.  When the trend of an individual stock turns downward, it is sold.  As a result, cash levels may increase as stocks are sold, but not immediately replaced.  Second, when it is determined that the overall stock market is in an intermediate term downward trend, all of the stocks will be sold and converted to cash.  The objective of this investment style is to outperform the S&P 500 Index during favorable market conditions and substantially reduce risk during severe market declines. 

During normal market conditions, this investment style will typically hold 25-30 mid, small, and micro cap stocks that are included in the Russell 2000 index.  Stocks are acquired or sold based upon a quantitative model using several fundamental and technical factors.  In addition to near optimal diversification, market risk is controlled in two ways.  First, only upward trending stocks are purchased if and when the overall market (as determined by the S&P 500) is in both a short term and intermediate term upward trend.  When the trend of an individual stock turn downward, it is sold.  As a result, cash levels may increase as individual stocks are sold, but not immediately replaced.  Second, when it is determined that the overall stock market is in an intermediate term downward trend, all of the stocks will be sold and converted to cash.  The objective of this investment style is to outperform the Russell 2000 Index during favorable market conditions and substantially reduce risk during severe market declines. 

This investment style normally invests in exchange traded funds ("ETFs") experiencing the strongest upward trends evaluated on risk-adjusted basis.  Candidates for purchases include country specific funds, global regional funds, US style funds, and sector funds.  Country specific funds include Japan, Taiwan, Korea, China, India, Russia, Brazil, Germany, England, France, Spain, Switzerland, Austria, Sweden and many others.  During global stock market down trends, this investment style's stock market exposure will be reduced in order to protect against further stock market declines.  The objective of this investment style is to outperform the MSCI All World Index during favorable market conditions and preserve capital during global stock market declines.

During normal market conditions, this investment style will typically hold 7-8 stocks that are included in either the Russell 1000 or Russell 2000 Indices.  Stocks are acquired or sold based upon a quantitative model using several fundamental and technical factors.  Market risk is controlled in two ways.  First, only upward trending stocks are purchased if and when the overall market (as determined by the S&P 500) is in both a short term and intermediate term upward trend.  When the trend of an individual stock turn downward, it is sold.  As a result, cash levels may increase as stocks are sold, but not immediately replaced.  The objective of this investment style is to outperform the Russell 2000 Index by 3 percent or more on an annualized basis, and substantially reduce risk during severe market declines.  This investment style is particularly appealing when an aggressive strategy is desired, such as in a small Roth IRA account.

Core Real Estate

Core - Real Estate Stocks

This investment style is for investors who want a liquid way to participate in real estate.  It normally invests in 10 publicly traded real estate investment trusts ("REITs") and will typically remain fully invested throughout a full market cycle.  This investment style generally favors the residential and health care sectors because they tend to be less correlated with the state of the economy.  The objective of this investment style is to add diversification to an investor's overall portfolio and earn attractive income from dividends.  The performance benchmark for this investment style is the Dow Jones US Equity REIT Index.  

Core - Apartment Buildings