History shows that Towle & Co.'s deep value investment strategy and asset composite can under-perform market benchmarks during periods of stock market disruption. Managed portfolios and individual stocks may decline in market value if the following occurs:
The overall stock market declines. A normal stock market correction could result in a 25-30% loss in portfolio value.
The market favors growth stocks over value stocks or favors large capitalization companies over small capitalization.
An adverse event, such as an unfavorable earnings report or restructuring announcement, temporarily weakens a particular company's investment profile.
Our judgment about the attractiveness, value and appreciation potential of a stock proves to be incorrect.
The Towle Deep Value strategy is appropriate for investors:
Willing to accept stock market risk and the volatility of smaller capitalization equities.
Possessing a minimum investment horizon of four years.
Seeking above average (after tax) growth of capital without the need for current income.