`TW' makes name for itself despite tough times
WASHINGTON TWP., Montgomery County - As the stock market plungedafter Sept. 11 and the economy tanked, two intrepid money managersset up shop.
James G. Tillar and Stephen A. Wenstrup, who learned the businessat the venerable Dean Investment Associates and James InvestmentResearch, opened Tillar-Wenstrup Advisors, LLC, or "TW," at 77 W.Elmwood Drive.
"There were sleepless nights and a lot of prayers," confessedWenstrup, who honed his skills at James Investment in Beavercreek.
But Tillar and Wenstrup, never doubting the future of capitalism,took the sell-off as an opportunity to buy good stocks on the cheap.
"We bought Check Point Software Technologies Ltd., an Internetsecurity firm, $20 and sold it later at $34 a share," Wenstrup said.They also scooped up Wisconsin Energy and Tidewater Energy ServicesCo.
The tumultuous, post-bubble shakeout in stocks was an excellenttime for TW's investment style, which is to buy quality stocks forthe long term and harvest tax losses when they occur, Tillar said.
Tax-loss selling means disposing of good stocks that have plungedin a weak market and buying them back after the required waitingperiod. The losses make nice tax deductions, according to Tillar, whowas an equity strategist at Dean.
"You can't do that with mutual funds," he said.
Launching the firm last October was a great opportunity, Wenstrupsaid. "I think it would have been tougher to begin in late 1999,because the market was just ridiculously over-valued. And you saw nosign that the crazies were going to stop driving the market higher."
When TW got rolling, the market already had weathered 18 months ofheavy selling. "And if we have another down year, this could be onethe longest bear markets in history," Wenstrup said.
But profits can be made in bear markets with the rightinvestments, says Paul Rice, another Dean veteran who is vicepresident for research.
Rice said TW's strategy uses several investment styles anddiversification to get a suitable balance of risk and return forclients. Age and other circumstances determine the amount ofinvestment risk a client can handle.
Tillar said diversification is the key element. "Over the longrun, all major asset classes offer investors attractive returns. Butin shorter time periods, returns among the asset classes may varywidely."
TW has $27 million in assets under management. The firm gotsupport in its early days by continuing to manage certain accountsfor Dean Investment Associates. It remains a sub-advisor to Dean, aDayton firm with $1 billion under management.
Tillar and Wenstrup don't expect a repeat of the roaring bullmarket for at least another five to 10 years. Homes and motorvehicles have sold well during the recession, thanks to low interestrates. As a result, there is little pent up demand to cause a boom inproduction and spending.
That means the stock market in the months ahead will face slowgoing. The S&P 500 Index will remain flat this year, Tillarforecasts. Continued scrutiny of corporate earnings to separate factfrom fancy bookkeeping will cause more uncertainty.
Tillar believes there will be opportunities for profits, but theywon't be in technology issues. He said they remain overvalued in anindustry with excess capacity.
* Contact Jim Bohman at 225-2242 or e-mail him atjim_bohman@coxohio.com
Quick facts
* Company: Tillar-Wenstrup Advisors, LLC
* Owners: James G. Tillar, CFA, Stephen A. Wenstrup
* Founded: 2001
* Research: Pat Rice, CFA, MBA
* Assets under management: $27 million
* Address: 77 W. Elmwood Drive, Suite 311, Centerville
* Telephone: 428-9700
* Fax: 436-7504
* Internet: www.twadvisors.com
No comments:
Post a Comment