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Ascent Capital Management

Ascent Capital Management, Inc. is incorporated in New York State and manages portfolios of equity and fixed income securities for wealthy individuals, eleemosynary institutions, and other organizations. Ascent was incorporated in 2004. Ascent's CEO is Peggy A Farley, who has been CEO of investment advisory firms and managing securities portfolios since 1985.

Ascent operates independently from all banks, all brokerage houses, all investment banks. There is no tie to any organization that would influence judgment with respect to investment decisions. Ascent Capital Management was developed purely to manage assets in the best possible way for its clients--and does so objectively. Selection of securities is based upon the merits of the underlying corporate or governmental entity and on the structure of the security itself.

All portfolios are managed on an individual and discretionary basis. Our portfolio management has as its goal a combination of wealth generation and income production. In general, the stock portfolios are growth portfolios: selection of companies is based not on dividends, but rather on a company's ability to expand revenues and grow profits. Portfolios contain a mix of large, mid-, and small capitalization stocks from diverse industries, with over-representation of the technology and medical industries. Stock portfolio management uses as a tool cash balances to protect against downward fluctuation in the markets.

Ascent uses several techniques to contain risk in the portfolios it manages. One method is diversity: each portfolio contains the shares of 20-30 different companies, with no company representing more than 10% of the portfolio. In this way, a sudden downturn in that company's share price will not affect the portfolio in a dramatic way. Similarly, no industry sector represents more than 25% of a portfolio. Certain industries can go out of favor with investors for long periods. Finally, each portfolio contains a mix of small, mid-, and large capitalization stocks so that during periods when any capitalization group is out of favor, the entire portfolio is not subject to a downturn.

In general, Ascent outperforms the principal indices when the markets trend upwards; when the markets turn downward, Ascent has sometimes but not always seen underperformance. Over the long term, Ascent has outperformed the markets very significantly. However, clients should understand that there is no guarantee of positive returns and that there is no strategy that can protect clients from temporary loss of principal during market catastrophes. Such losses, however, should not be seen as permanent, for, by nature, markets and stocks rebound.

The key to success is in stock selection. Ascent's liking for the technology and medical sectors tend to offset one another. Technology companies can be volatile while medical companies tend to be defensive, holding steady in times of severe market downturns. While it is beneficial to focus on innovative technology advances, it is also important to maintain those companies whose products command market longevity.

The technology and health care sectors are the driving forces of the US economy. In rising markets, the outperforming stock prices of producers of tangible technology products are justified by sales growth and product diversification. In the medical arena, stock prices are often stable and rising when the market, as a whole, is down because the aging population and continuing product pipelines sustain growth.

With respect to fixed income, Ascent sees interest-bearing portfolios as critical to client financial safety and portfolio income rather than as a vehicle for risk and gain. Therefore, Ascent emphasizes the highest quality instruments for its portfolios. The risk inherent in long term and lesser quality instruments is avoided totally.

Ascent's market and stock surveillance is continual. Throughout every day, Ascent watches the markets, portfolio contents, and prospective purchases through a real time data tracking base. Actions are taken when warranted and differ based on each holding's characteristics. For example, if a stock rises a great deal over a short period, and the profit on that stock is in excess of 20%, Ascent may sell part of the stock position to lock in the profit, leaving the remainder to rise. In that way, the stock position continues to be less than 10% of the portfolio and cash is on hand to protect from market downturns and/or to be used for a new and exciting investment. At times, however, Ascent will sell an entire position at a profit. This may occur when Ascent's experience is that the particular company is vulnerable to rises and falls within a specific range that is never exceeded and the top of that range has been hit. Sales of full positions may also occur when a downturn in the market is anticipated and Ascent wishes to lock in the profit and have cash on hand.

Ascent client portfolios are in safekeeping with Pershing LLC, a major clearing house, through SSG, an administrator of portfolios for Registered Investment Advisors. Pershing acts as custodian of the securities, and is responsible for settlement of transactions in the portfolios. The custodian ensures that all transactions are processed properly and that the accounts' contents are recorded and maintained with pristine attention to detail.

Detailed monthly statements are sent directly to clients by Ascent's custodian. These reports provide information on portfolio content, on the value of the portfolio, on transactions in the portfolio during the month, and on cash position. Performance reports are sent to clients by Ascent's custodian quarterly, comparing Ascent's performance to the relevant indices.

Ascent is happy to provide services for clients such as monthly distributions from accounts, scheduling Required Minimum Distributions from IRA's, arranging for custody of stock certificates for private company investments, and the like.

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