Investments & Process

Investment Methodology

Investment selection with a long-term outlook is emphasized at Luna Capital Management (LCM). We also believe that client investment portfolios should generate meaningful current income, primarily in the form of cash dividends. Employing an institutional approach to investing, we have implemented a thoughtful and consistent investment selection process and employ measures to control risk and volatility. Our firm will seek to protect and grow client assets while providing the greatest potential for total after-tax return.
 

Stock Portfolios

For the equity and stock portion of client accounts, Luna Capital seeks to select financially strong companies with favorable growth and profitability metrics. Many of our investments pay attractive cash dividends. We screen from a universe of over 3000 stocks traded on the U.S. stock exchanges.  From time to time Luna Capital may include  Exchange Traded Funds (ETF's) or mutual funds as portfolio investments.

We may utilize both fundamental and technical analysis to assess the suitability of the investment for inclusion in client portfolios.  Metrics such as P/E ratio, current ratio, debt/equity ratio, profit margin, return-on-assets, relative value, and dividend yield may be factors used in the evaluation of equities of companies.   Luna Capital may review institutional money flow and insider buying activity to assess potential equity investments                                                                

Equity investments are exchange-traded public companies. Luna Capital does not engage in shorting of securities, however, may employ the use of derivatives (Put Options) to reduce risk if the Portfolio Manager believes that market conditions warrant their use.

Exchange-traded funds (ETF's), and or mutual funds are sometimes used to gain exposure to certain sectors of the market.
 

Fixed-Income Portfolios

Capital preservation and income generation are the primary goals of the fixed-income portion of client accounts.

U.S. Treasury securities, corporate bonds, municipal bonds, fixed income ETF's or mutual funds are the main components of the fixed-income portfolios.  In general, investment-grade debt instruments are the focus of the fixed-income portfolios. Fixed income portfolios may consist of individual securities, ETF's or mutual funds.
 

Cash and Equivalents

The cash portion of client accounts is held in money-market mutual funds, cash or cash equivalents.