Our Firm

Fruth Investment Management provides independent, professional portfolio management for individuals and institutions. Founded in 1992 on the premise that investment advisors work solely for the benefit of the client, we fashion equity-only and balanced portfolios to meet each individual client's needs. Our goal is to grow our clients' wealth through outstanding results over multiple market cycles. Consequently, we make a strong effort to foster long-term relationships with our clients.

Our Beliefs

As investment advisors, we have a responsibility to be prudent and objective, viewing each decision for a client in terms of its effect on the client's portfolio as a whole. To ensure this objective, we remove all conflicts of interest and work directly and exclusively for our clients in order to help them achieve their investment goals. Additionally, we are committed to the highest level of ethical standards by always placing the interest of our clients first. In other words, we manage client assets as if they were our own.

Our Clients

We manage approximately $200 million for more than 300 families, individuals, and institutions. While our clients and their investment goals are diverse, their account types generally fall into one of the following categories: individual, IRA, 401(k), or corporate. Our clients are located across the country and around the world, with the majority residing in Texas. The diversity of our clients and their account types testifies to our ability to individualize each portfolio.

Our Responsibility

Fruth Investment Management is a Registered Investment Advisor with the Securities and Exchange Commission (SEC) and is bound by the Investment Advisors Act of 1940. This means that Fruth Investment Management has a fiduciary responsibility to disclose all material information to you as a client.

We are not stockbrokers. We are independent, management fee-only investment advisors, and we are compensated exclusively by our clients. No commissions and/or "perks" are paid to Fruth Investment Management for any of the investments selected for a portfolio.

All of our research is performed in-house. We are therefore free of bias and undisclosed agreements between underwriters and corporations on Wall Street.

Our Approach

Our first priority for any client is determining an optimal asset allocation based on the client's investment needs, risk tolerance, and market conditions. After the asset allocation mix is determined, we then identify suitable investment opportunities in equities and fixed income, with the relative weighting dependent on the individual client.

...to Stocks

At any given time in the equity market there are undervalued stocks that offer long-term price appreciation potential with a reduced level of risk. We attempt to identify these equities through the use of a proprietary computer program that screens over 9,000 stocks for certain criteria. The small percentage that survive are narrowed further through analysis of the company's current and projected fundamentals, balance sheet strength, valuation, and consistency in generating growth in sales, earnings, and cash flow. Dividend income is an important component of long-term returns. Consequently, equity portfolios will usually hold multiple stocks with a proven track record of rewarding shareholders through increased dividends. Technical analysis is used to optimize the decision regarding the timing of purchases and sales. Average portfolio turnover of 10%-20% per year minimizes trading costs while maximizing tax efficiency. A stock is sold when the original investment thesis is no longer intact, the price target is met, or a more attractive alternative is found.

...to Bonds

We view bonds as attractive instruments that reduce overall risk in a portfolio, while serving as a source of predictable cash flows. Individual bonds, including corporates, municipals, and treasuries, are purchased in client accounts where deemed appropriate. Despite the perceived less risky nature of bonds, we thoroughly evaluate 1) the financial stability of the issuer, 2) the characteristics of the issue, 3) the outlook for interest rates, and 4) the compatibility with the other assets in the client's account -- all decisions are made with consideration to the effect on the overall portfolio.