Investment Approach Stock and bond selection is based on a careful analysis of fundamental factors. BCM believes that the allocation of assets between various investment alternatives is one the most important and rewarding decisions that can be made by any professional money manager. Asset allocation is governed by the client`s investment objective along with an assessment of the economic and market environments. Therefore, asset allocation is continually reviewed. Critical decisions are based upon an analysis of the expected return from stocks, bonds and cash equivalent securities. The expected returns from stocks are compared with the yield-to-maturity of fixed income securities. The risk premium of stocks helps to determine the percent invested in equities. By investing in a variety of securities helps reduce the risk of price fluctuations in a single security. The prices of most individual securities tend not to move close together. As the price of one increases, the price of another may move up less or decrease. Consequently, by investing in several securities that is by diversifying can often smooth out fluctuations. The balancing of equities and bonds reduces the investors dependence upon economic condition and provides the portfolio with a greater ability to generate consistent returns over a succession of market cycles.