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Brooktree Capital Management’s strategy is designed to maximize long-term client and family wealth. Our strategy is based on four key components:

We’ll be the first to admit that our approach is unique – and not for every one. Sure this narrows the playing field, but we see that as a great thing. And we take our responsibility seriously, which means we don’t make decisions for our clients that we wouldn’t make for ourselves. Appealing to a select number of likeminded clients who understand and share our philosophy means we can offer extremely personalized service. And when we say our services are customizable, that extends far beyond the portfolio. We take our cues from our clients – by operating as independently or as closely as they desire.


We believe that data and communication matters. This has driven us to invest heavily in technologies that provide the analytics necessary to support and evaluate investment decisions. This helps us to continually monitor existing or potential investments keeping our focus on your individual situation. In addition to less formal, ongoing communications, each month we generate detailed custom reports to be reviewed with our clients at their discretion.


Here’s a deeper look at the pillars of our approach:

Transaction Costs

There are many costs that are incurred in overseeing a person’s assets including: custodial fees, advisory fees and brokerage fees. Over time these costs can significantly eat away at a client’s wealth. And while these fees cannot be avoided entirely, they can be minimized over time, thereby creating more wealth for the client.

How? Our ability to leverage our assets under management ensures greater buying power for these services, and is aggressively pursued for each client’s long-term benefit. When combined with an equity philosophy that does not emphasize active trading of securities, transaction costs are minimized over time. Additionally, BCM’s advisory fee schedule is very competitive, specifically designed to help further this goal.

Minimize Taxes

The role of taxes in today’s investment world cannot be overlooked for individuals who have substantial assets that are not held in tax deferred plans like 401ks, IRAs, etc. Therefore, the decision of when to realize gains or take losses is a power you should jealously guard. Brooktree Capital Management works closely with our clients to assure that we collectively retain control over the ability to realize these gains and losses. We do not advocate investing in mutual funds because the ability to recognize gains and losses (as well as generating transaction activity) resides with the respective fund manager, who is unconcerned about an individual’s personal tax situation. At Brooktree Capital Management, we are fully aware of each client’s tax situation so that investment decisions and recommendations are made with these tax implications clearly in mind. By applying this knowledge to our investment decisions, capital gains taxes and transaction costs we seek to minimize.


Investment Selection

Determining where to invest on behalf of our clients is based on strategy and precision. Through a broad battery of criteria, our goal is to construct each client’s portfolio for the optimum growth consistent with client objectives and risk tolerance. The investments we use can be broadly grouped into three main asset categories: cash, fixed-income (bonds), and equities (stocks). Over time and consistent with each client’s needs, we attempt to allocate as high a percentage as possible to equities. This is because stocks have historically outperformed cash and bonds in a long-term investment plan.

  • Cash will be used primarily as a reserve account, holding funds for deployment to bonds or stocks, depending upon the prevailing market environment.
  • Bonds are the primary investment vehicle to provide and/or augment a client’s current income needs. In order to meet these needs, BCM will purchase primarily high-grade municipal bonds (to minimize taxes and maximize after-tax returns). We will not attempt to guess the direction or magnitude of interest rate increases or decreases, but will simply take what the market provides at the time of investment. Brooktree Capital Management will not actively trade the bonds but will instead pursue a “hold to maturity” strategy, thereby seeking protection of principal.
  • Equities or stocks are the prime investment vehicle used to generate long-term growth in client wealth. Investments are made in companies exhibiting some or all of the following characteristics: steady business with inherent demand, strong cash flow generation, low debt relative to equity and total capitalization, and pricing or market power. Additionally, BCM will attempt to purchase stocks for clients in situations where we feel the market price is under priced relative to the underlying value of the company. We will sell equity positions when we feel the long term underlying fundamentals of the company have deteriorated to a point where the after-­tax money realized can be better invested elsewhere.


One of the most powerful investment tools is the power of compounding. For example, if $1 doubles every year and no taxes are paid on the yearly gains, the investor will have over $1,000,000 after twenty years. If, on the other hand, an investor doubles that initial $1 investment each year but pays taxes on the gain at a 30% tax rate each year, and that after-­tax money doubles in subsequent years, the investor will accumulate barely $41,000 after twenty years, of course this example does not suggest that Brooktree Capital can double your money every year, but it does show dramatically the incredible power of compounding and the dramatic effect of taxation. In order for any compounding effect to work for clients, a long-term, tax-efficient strategy should be used with the equities we purchase. As the example illustrates, a trading strategy where taxable transactions occur frequently will have a significantly tougher time outperforming a steady buy­-and­-hold approach, where unrealized gains are allowed to compound on a tax deferred basis.