Patten and Patten

Patten and Patten

Portfolio Construction

We apply a disciplined approach to asset allocation and security selection. Our portfolios are designed for long-term growth, emphasizing low relative turnover and volatility.

Each of our client relationships is managed on a separate account basis: we do not commingle assets or assign clients to generic, preset strategies. Rather each client has their own account that is custodied with one of our third-party custodial partners (e.g. Charles Schwab, Pershing Advisor Solutions). This approach gives each client the advantage of a customized portfolio that fits their specific needs and incorporates personal preferences for both risk and return.


While the allocation of assets and securities depends upon the specific needs of the client, our typical portfolio includes a balanced mix of stocks, bonds, cash, and certain alternative investments. In general, our portfolios are composed of individual common stocks, individual bonds (e.g., US Treasury Notes and Bonds, Federal Agency Notes, High Grade Corporate bonds), and the ADRs (American Depository Receipts) of certain foreign issuers. Patten & Patten engages in active management, but also invests in passive instruments such as exchanged-traded funds (“ETFs”) to increase diversification or to acquire exposure to sectors for which the use of individual securities might prove inappropriate.


Our security selection and asset allocation process is informed by rigorous fundamental research and guided by a team with over a century of cumulative investments experience. Our team utilizes a “Top Down/Bottoms Up” approach. “Top Down” describes our extensive review of broad economic/market indicators to identify asset classes and industry groups to overweight or underweight. An additional objective of our “Top Down” analysis is to capitalize on favorable secular trends.


“Bottoms Up” refers to our independent research performed to identify attractive securities. Our “Bottoms up” analysis is time intensive, thorough, and demanding. Typically, we will not invest in a security until one of our portfolio managers or analysts has constructed a detailed financial model, spoken with third-party consultants, analyzed relevant SEC filings, and presented a detailed report for review by the Firm’s Investment Committee.

Our portfolio managers generally seek to hold investments for the long-term and avoid concentration in any single security, sector, or asset class. This approach to investing is designed to provide for long-term growth, emphasizing low relative turnover and volatility below that of the benchmark. Over time, we believe this approach enhances the net returns to investors. In our view, this style of investing will maintain its importance as market dynamics continue to change and should, over time, generate superior risk-adjusted returns.