Investment Process

The investment process begins with a view of interest rates and inflation. Other factors considered may include but are not limited to:

  • money flows
  • demographics
  • innovations
  • political risk

This process is intended to lead to the best sectors in which to invest. Fundamental analysis is conducted to determine the best companies in these sectors. Finally, technical factors are reviewed and an investment decision taken. Because this process is intended to lead to investment in only certain sectors, the portfolio will not necessarily be weighted like an index fund and can be expected to have significant variance from the S&P 500 Index. Securities which do not perform as expected will be eliminated from the portfolio and replaced with companies that appear to offer greater opportunity. Companies that continue to grow satisfactorily will be allowed to increase in the portfolio, unless the holding becomes too concentrated, in which case even high performing securities will be trimmed and the proceeds reinvested. Portfolios may become concentrated as a result of significant growth of one or more securities. In order to reduce risk and dampen volatility, a portfolio will normally have about 40 holdings. Turnover is intended to be low.

Similarly, the fixed income process will consider a view of interest rates and inflation, money flows and political risk. Mutual funds will be employed for diversification. Convertible securities may be used as a further form of diversification.

Unless a client has instructed otherwise or due to repositioning timing, client’s funds will normally be fully invested.

Order Execution And Custody

Portfolio turnover and transaction costs can negatively impact portfolio performance; therefore Rutherford Investment Management strives for low portfolio turnover. Rutherford’s access to the portfolio is direct and client accounts are updated real-time at Schwab after trades have been processed.

The broker, selected by the client, performs the duty of custodian. Rutherford Investment Management has full discretionary authority over investing the portfolio. With the exception of client authorized management fees, cash can only be removed from the portfolio by the client. Portfolio balances are available to the client 24/7, under normal circumstances, on the custodial broker’s website.


Rutherford Investment Management uses a wide variety of public resources to keep abreast of market conditions and economic trends as well as company specific information. Information may come from proprietary research, Standard & Poors, SEC filings, company announcements and meetings, insider selling, breaking news, and other industry sources.