Investment advisory services offered through Sharma Associates, Inc.
Securities offered through Resource Horizon Group, L.L.C., Member FINRA,SIPC
1350 Church Street Ext. NE3rd. Floor, Marrietta, GA Phone: 770-319-1970
Sharma Associates, Inc. and Resource Horizons Group, L.L.C. are not affiliated.

Investment Philosophy:

Let me share my investment philosophy:

Opportunities in equity investing can be identified in a variety of ways. One common approach is called growth investing, focusing on the stocks of companies with expected earnings growth in the near future. Often these companies are believed to be either starting, or currently in, a period of substantial earning growth and are typically priced higher relative to the value oriented stocks.

Another approach is called value investing, which focuses on finding undervalued companies that exhibit the potential for long-term growth. Often, the stocks of these companies are considered "out-of-favor" for variety of reasons, such as turbulence in a company business, its product cycle or the economic environment. Also, investor overreaction to a company short-term difficulties can often drive stock prices down, which can present opportunities to buy a stock at a low price.

History has shown that it is very difficult to "time the market" that is to predict in which year a particular style will be in favor. Historically, growth and value investments have often moved in different cycles, but have had similar returns. Since we never know which investment style will perform better at any given time, combining both growth and value investments styles can be an efficient way to enhance long term investment returns.

Like any investment combining these two styles does not guarantee a profit or eliminate risk altogether, but only minimizes the risk. To further minimize the risk, it is important to diversify growth and value style into large cap, mid cap and small cap mutual funds.

This type of portfolio aims at maintaining a 50/50 split between styles. If a portion of either growth or value exceeds 55% of the total portfolio, it will be rebalanced half way back to 52.5%, to our 50/50 target. This formula seeks to "let the winners run" by allowing the leading assets class to have a marginal overweight without exposing the portfolio to undue style risk.

To diversify and balance the portfolio, one third of the portfolio need to be invested in international and real estate investment trusts or corporate bonds.

Investment Strategy:

I use this strategy to create a portfolio based on your personal investment profile for risk tolerance, time horizon and investment objectives. I monitor the portfolio quarterly and balance periodically after consultation with the client to meet the investment goals.

I provide a complete, unbiased analysis of investments / investment portfolios and make well thought out recommendation to fine-tune or create a well diversified, balanced portfolio to match the risk tolerance and time horizon of the client. I keep all my clients well informed through a well researched quarterly report.

In the last few years, we have seen some abuses in the mutual fund industry. Many mutual fund families had been doing things which were not in the best interest of their shareholders / investors.

Now I create all my client portfolios utilizing exchange traded funds (ETFs) and gradually move other investments from mutual funds to ETFs such as IShares index funds because of the following three main reasons:

1. ETFs or IShares are very much like mutual funds, but trade like stocks. One can buy or sell these IShares like stocks   and does not have to wait till 4:00 PM to find out the value or price of the fund.


2. An expense ratio of ETFs such as IShares index funds is much less than the mutual funds.


3. Currently, there are over 250 ETFs available and one can easily create a well-diversified portfolio utilizing ETFs to  represent all asset classes and styles in each asset class.

I create, monitor and manage customized investment portfolio to match the clients' risk tolerance with time horizon in order to achieve financial goals, on fee basis to avoid any conflict of interest.

Every quarter I analyze each portfolio and inform you with a personalized letter about the status of your investments and the portfolio. Since I manage the portfolio on non-discretionary basis, I always discuss and review with you before making and any buying and selling decisions or transaction.

As you know, past performance is no guarantee of future results. At any point of time, your investments may be worth more or even less than your original investments due to the market fluctuation.

Most of the time there will be some short-term taxable income in the portfolio because of dividends. In order to neutralize the short-term taxable income, I suggest leveraging the portfolio up to 20% to 25% margin. Taxable income from the portfolio will be neutralized with margin interest.

This strategy has to be fully discussed and understood so that one becomes comfortable with the inherent risk in this before it is implemented. Margin will be used to buy only individual stocks or exchanges traded index funds. Any stock or ETFs which is bought on margin will also have a stop loss arrangement to limit the down side risk to 10% to 12%. This particular strategy will cap the risk to 10% or 12%, but provides an unlimited upside potential.

For example: ABC company stock is bought at $100.00 per share, at the same time, we also place a stop loss order at $88.00. If stock is down to $88.00, that order will be executed and stock will be automatically sold and that will limit the downside risk (loss) to 12%. This will provide an opportunity to capitalize on the upside potential and still help to minimize the downside risk. This kind of strategy will work most of the time but not 100% of the time, but will certainly limit the down side risk of the portfolio and benefit from upside potential of capital gains from the stock. This needs a thorough discussion.

Three Steps for Developing an Investment Strategy:

Step One: Determining Investment Profile

The first step in creating a professional investment plan begins with a meeting to develop a profile that describes investment temperament. The profile will predict long-term goals, time horizon for achieving those goals and feeling about investing.

Once completed, Investment profile becomes the basis for structuring the investment model that is best suited to meet financial objectives.

STEP Two: Implement Investment Plan

The portfolio is designed to offer a diversified and professionally managed asset allocation program.

Why is it so important to diversify? Experts agree that diversifying the portfolio among different types of assets and among different investment styles is critically important.

Diversified portfolio contains combinations of stocks, bonds and money market mutual funds from both domestic and international marketplace. Allocating assets in this manner may reduce the impact that under performing securities will have on your portfolio while increasing exposure to investment opportunities.

Two levels of Diversification

By Investment Class: Assets may be allocated among domestic and international equity, bond utilizing exchange-traded funds (ETFs).

By Investment style: Equity investments are balanced among companies of varying sizes and market capitalization. Bonds are differentiated according to type, duration and credit quality.

STEP- Three: Ongoing Monitoring of Your Portfolio.

Investing would be much simpler if the markets remained static or only go up. However, the investment world is a constantly evolving landscape of economic cycles and political and social issues, and all of these variables have a significant and continual influence on the financial markets. As such, your investment allocation cannot remain in a fixed state, but must adapt to changing market conditions.

I constantly monitor current market conditions, review historical and current financial data to evaluate its potential impact on financial markets.

Assets are rebalanced or reallocated as necessary to reduce exposure to areas that are expected to under perform and increase exposure to those areas that appear to posses greater potential for growth.

This dynamic asset allocation process ensures that your assets receive the ongoing attention that is crucial for success in the ever-changing investment marketplace.

If you have any questions or need additional information, please feel free to call or email me. I am usually at my desk from 8:30PM to 10:30 PM doing the paprework. This is the best time to catch me. During the day, you can always get hold of me at my cell phone: 610-613-1924.