INDIVIDUAL INVESTORS DIFFER FROM INSTITUTIONS

1. With the S&P 500 Index flat thus far in 2015, our Investor Objective Based Portfolios are
experiencing exceptional returns[1]; +12.3% Japan, +9.9% High Growth, +9.7% Euro
Centric, +7.2% MicroCap, +6.7% Emerging Markets, and +5.7% High Dividend.
Our success, we believe, lies in the fact that these portfolios are designed to achieve
the stated goals of individual investors, such as High Growth, High Dividends, Capital
Preservation, etc.
Institutional Managers on the other hand generally utilize “Market Definitions” such as
Domestic Large Cap, Mid-Cap and Small Cap along with a strategy descriptor such as
Value, Growth or Blend.
In our view, unless an investor has an in-depth understanding (risk, value, investment
cycle) of the entire market and the various segments within, knowing that a portfolio is a
Large Cap Value Fund is not particularly useful.
Institutional Investment Committees with the assistance of consultants, strategists and
analysts set targeted percentages for each market segment such as Large Cap Value,
Large Cap Growth, Small Cap Value, Small Cap Growth, etc. While the amounts
allocated might be reviewed and adjusted quarterly, the time frame for being invested is
often perpetual and thus quite different from most individuals.
Investor Objective Portfolios may find themselves with large allocations to a particular
market segment (e.g. many High Growth Funds invest heavily in Info Tech and Biotech
stocks), but we believe that investors seeking consistent growth require more freedom
to pursue the investor’s stated goal.
For example, an investor following an institutional allocation approach might choose to
invest in a Small or Mid-Cap Domestic Fund for his allocation to growth which may be ill
advised for the following reasons:
 If an investor enters a segment at a time when it is overvalued, it may take years to catch
up or to show above average growth.

2.  Some of the greatest growth stories over the last five years are IPO’s which have become
mega-cap companies and would have never been suitable for purchase by a Small or Mid-
Cap Manager. Examples include Google, Tesla, Under Armour, Facebook, Visa, Alibaba,
etc.
 Fast growing and well-run companies can be found across all geographic borders.
Therefore, a food company selling noodles in China might be outgrowing Facebook and
may offer a better investment value.
 A well run small cap company may ultimately become a large cap company thus requiring
sale by a small cap manager. A growth manager will hold the company as long as growth
remains exceptional relative to the market.
Twenty years ago, managers began to realize that “Institutional Think” and “Herd
Mentality” might not be in the best interest of their investors and created Hedge Funds
to provide more freedom to pursue investor goals across multiple assets classes.
And while most Hedge Funds have morphed into vehicles that offer disproportionately
high risk to justify high fees, we feel that the initial concept of providing manager
flexibility to meet investor objectives is sound and well suited for the individual investor.
Bear in mind that all managers encounter periodic macro headwinds, most of which are
unpredictable in terms of onset and duration, but these headwinds are often temporary.
Therefore, a high dividend portfolio manager who holds top tier companies across
different market segments, industries and geographic boundaries may be negatively
impacted by an unexpected Fed announcement of raising interest rates. Growth
strategies on the other hand might be adversely impacted by a GDP Report that falls
short of expectations.
However, the portfolios that come back the fastest and resume satisfying investor goals
are the ones that hold the best companies and resist panic selling and return chasing.
Thus, we recommend that investors identify managers who have a track record of
finding exceptional companies and remaining patient and rational during turbulence, a
process which is often rewarded with strong results, such as +10% in the first three
months of a sideways year.

3. The preceding represents the views and opinions of The Stanley-Laman Group, Ltd., a
Registered Investment Advisor serving individual and institutional investors and is not
intended as investment advice nor are the opinions offered suitable for all investment
objectives.
[1] Returns are based on SLG separate managed account composites for 1/1/15 –
3/31/15