Stock prices fluctuate over the short term with cyclical changes in interest rates, capital market flows and changes of perceptions of business prospects of the companies in question. Healthy stock markets, strong capital flows, low interest rates and good business news tend to make share prices rise; weak stock markets and capital flows, high interest rates and adverse business news tend to have the opposite effect. Macroeconomic cycles can also affect individual industry sectors of the broad stock market differently.

Some equity investors attempt to "call" these macroeconomic cycles. We at Phocas Financial believe that this approach cannot succeed over the long term.

Our Small Cap Value strategy strategy seeks to provide strong returns over long time periods with minimal risk, across macroeconomic cycles and industry sectors. We focus on broadly diversified positions in Small Cap Value equities, using both qualitative and quantitative criteria to choose those companies that we feel provide the best long-term value.

We strive for balance through diversification of our Small Cap Value holdings across major industrial sectors, with an emphasis on stocks with a high potential for attractive appreciation.