INVESTMENT PHILOSOPHY

Klingenstein, Fields & Co. follows a value-oriented, long-term investment approach with the objective of achieving superior returns, which are ultimately reflected in capital appreciation. More specifically, we seek to:

• Preserve capital over time.
• Achieve growth while limiting risk.
• Obtain excellent results after tax and inflation.

Our attention is focused primarily on equity portfolios comprised of listed, marketable securities because, over time, equities offer greater potential for appreciation within reasonable levels of risk than other types of securities.

We seek to invest in the leading companies in industries that are likely to expand faster than others through both:

• “Top down approach,” monitoring global trends and identifying sectors likely to have strong secular growth, and
• “Bottom up approach,” seeking stocks that are attractively priced by the market relative to our estimates of inherent value, absolute levels of demonstrable earnings and future earnings growth.

With this perspective, we concentrate on companies that appear to reflect relative value. Generally, these are large domestic companies, but from time to time we are investors in smaller companies in rapidly growing industries. We also have the flexibility to allocate small portions of the portfolio for “opportunistic” reasons such as, companies where there may be a change in management, capital structure or control. Most of our international exposure has been attained through U.S. companies with business abroad.

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