The Four Questions Behind Every Investment Decision We Make

We often get asked, "How do you decide what to invest in?"

At Edwards Asset Management, we actively manage a suite of investment portfolios with varying time horizons, benchmarks, objectives, and criteria. Our portfolios span everything from high-income strategies to high-growth opportunities, each tailored to meet your financial objectives.

Given the uncertainty in markets, the economy, and geopolitics, it’s worth providing a peek behind the curtain—into the disciplined process that our Investment Committee uses to evaluate and select the companies that make it into our portfolios.

Amid these differing objectives, one theme remains consistent: We strongly favor high-quality companies. Given the recent market volatility, we are dedicating substantial resources to evaluating new opportunities while rigorously assessing our existing holdings.

To ensure each company meets our exacting standards, we focus on four critical questions:

"We look closely at whether management effectively prioritizes and rewards shareholders, ensuring alignment and ongoing trust."

Are you an industry leader with durable competitive advantages?

Simply put, we want to back the best horse in the race. Even the strongest companies face setbacks, but market leaders typically bounce back the fastest because they've proven they know how to succeed.

What is the health of your balance sheet?

We generally favor companies with low debt levels. While debt can sometimes be strategic, companies able to fund their operations organically through various economic cycles offer greater stability and resilience.

Are your revenues, margins, and ability to generate cash sustainable?

Strong and sustainable revenue streams are essential. Companies that consistently generate robust revenues are positioned for ongoing profitability. Without dependable revenue growth, profitability typically becomes reliant on cutting expenses, which is rarely sustainable over the long term.

Have you demonstrated a commitment to rewarding your shareholders?

Competent and experienced management teams deserve proper compensation for their success. However, shareholder interests must always remain the top priority. We look closely at whether management effectively prioritizes and rewards shareholders, ensuring alignment and ongoing trust.

Why it matters for your wealth

We believe having discipline and rigor around your investments are crucial because wealth is personal. Without carefully selected investments, you're more likely to be pulled into unnecessary risk or missed opportunities. In uncertain times, having a clearly defined and thoughtful approach isn't just beneficial—it's essential to preserving, growing, and enjoying your wealth.

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Rob Edwards

Managing Director

Senior PIM® Portfolio Manager

RobEdwardsWealth.com

Hey, I’m Rob Edwards. Thanks for reading this month’s column.

As a nationally recognized advisor, I have one goal: To help clients make more thoughtful and intentional money decisions so that they can enjoy the best version of their life.

In working with high-net-worth families, I know that with more money and prosperity comes complexity and the potential for making mistakes.

So, whether you’re asking questions about saving for retirement, transitioning your business, or how your money can make the greatest impact, my team and I are here to help.