Overview

Who We Are

David Edwards is a graduate of Hamilton College and holds an MBA in General Management from Darden Graduate School of Business (University of Virginia.) David Edwards was a guest contributor of over 100 columns to TheStreet.com, is a frequent guest commentator on Bloomberg, CNNfn and First Business, and is a member of the New York Society of Security Analysts and the Investment Adviser Association.

Peter Louderback is a graduate of the University of Vermont.

Heron Capital Management, Inc. abides by the ethical principles established by the CFA Institute, the Investment Adviser Association and the Financial Planning Association (FPA).

Benefit from the Experience of Heron Capital Management, Inc.

Heron Capital Management, Inc. encourages investors to take a long-term view when they invest with us. By looking down the road, many people realize that they don't have the experience, time, training or patience to make informed investment decisions alone. That's where the value of a financial advisor can really make a difference.

Heron Capital Management, Inc.:

• takes the time to understand clients' goals and investment needs
• has the experience to help clients develop a financial strategy designed for their specific situation
• can determine the best way for clients to allocate assets
• monitors investments for changing conditions
• can offer additional assistance during volatile market periods
• tracks capital gains and losses to minimize taxes paid

Investment Philosophy & Strategy

We believe that individuals and institutions come to investment managers because they require an investment strategy customized to fit their needs and goals. We respond to an inquiry by asking a potential client to fill out a questionnaire which details their previous investment experience, their current portfolio, their tolerance for risk, and their short and long term financial goals. Based on this questionaire and follow-up conversations, we develop an investment strategy which we believe is appropriate for that client.

Heron Capital Management, Inc. begins with a top down analysis of economic conditions, evaluating the climate for investing in the stock market. This macro model uses information about the yield curve, commodities prices, currency movements, and movements in the major indices to come up with an overall bull/neutral/bear rating on the stock market. The second model recommends asset allocations among different sectors of the stock market depending on whether the economy is in the early or late stages of expansion, or whether the economy is in a period of contraction.

Heron Capital Management, Inc. evaluates individual companies using a combination of quantitative, technical and fundamental criteria which have been shown through experience to give reasonably good objective selections. Quantitative selections are backed up with additional qualitative analysis. About 250 companies, diversified across the major stock market sectors of technology, healthcare, financial services, consumer durables and non-durables, energy and business services, satisfy these criteria.

A typical client’s account will have an exposure of 100% to stocks in a period rated bullish by the macro model, 75% in a period rated neutral and 50% in a period rated bearish. The remainder of the account will be invested in bonds or money market instruments as is deemed appropriate by the firm.

In constructing portfolios, consideration is made of the client's financial objectives, the degree of industry diversification in the account and any other factors governing the client's account. Each portfolio will hold between 28-40 individual stocks, with no more than 25% of the account allocated to any one sector. Initial positions range from 2-3% of the portfolio. Positions larger than 5% are monitored particularly carefully, while positions which grow to over 10% of a portfolio are automatically cut back by half. Fixed income securities may be included as necessary to achieve client's objectives for total annual return.

The majority of client accounts at Heron Capital Management are taxable so minimizing realized capital gains is an important part of our work. Turnover (defined as the number of times that an asset has been replaced per year) in client accounts averages 20%/year which is the equivalent of holding stock positions for an average of five years. Capital gains are deferred until the asset is sold, commission expenses are minimized. More aggressive managers average turnover of 100-150%/year; however, we don't believe such heavy trading is in the best interests of our clients.

Our Clients

Wealth accumulators: These clients are generally 30-50 years old investing substantial bonuses, proceeds of exercised stock options and inheritances. Since their immediate needs for income are covered by current employment, these clients desire maximum capital appreciation and have at least a 5 year investment horizon.

Pre/Post Retirees: These clients are generally 50-70 years old and have recently retired or plan to do so within the next 5 years. A higher percentage of their assets are invested in fixed income securities to provide a predictable level of income. However, a portion of their assets remain invested in stocks to continue growing their accounts to offset the effects of inflation.

Charitable Trusts: Charitable foundations, in accordance with Federal regulations, must disburse at least 5% of assets per year. These accounts are invested to provide cash flow sufficient to cover the annual disbursements while continuing to grow the asset base.