Welcome to TERRIL & CO.

Terril & Company is an independent wealth management company founded in 1979 by John “Joe” Terril. Since then, referrals from satisfied clients and third-party professionals have fueled virtually 100% of its growth.

The company takes a highly personal approach to serving clients, which typically include high net worth individuals, trusts and private/corporate retirement plans.

Members of the Terril staff answer their own phones and truly offer close, personal service.

The investment selections Terril makes are based solely on their potential to produce positive, long-term returns for clients. The firm derives 100% of its revenue from client fees and 0% from commissions tied to the sale or purchase of securities.

Fundamentals foremost; patient, often contrarian investing

Recognizing that “bandwagon” investing and playing momentum historically result in catastrophic losses, Terril & Co. searches for investments with characteristics or catalysts not fully appreciated by markets. As a long-term investor (usually three years or more) Terril will hold out-of-favor investments until positive change in their fundamentals becomes evident. While Terril hunts for unrecognized investment opportunities, it stows investor capital in liquid short-term investments to produce income and protect principal.

Terril & Co. believes that its willingness to make disciplined investing decisions apart from “the crowd” is central to its success. Why? Because many professional money managers chase performance and buy the ”hot” investment trends of the day.

Psychologically, it’s far easier for managers to buy the investments their peers are buying because being wrong with “the crowd” is more comfortable than being wrong while standing alone.

Many investors – professionals included – are apt to underestimate investment risk. In bull markets, they are eager to buy more of what is high in price. They tend to manage to performance benchmarks and are more inclined to expand risk boundaries. In bear markets or with out-of-favor assets, their evaluations often fail to reflect the truism that many times, when an investment is low in price, significant financial risk is already eliminated.

Seeking 3X the reward for risk assumed

Terril & Co. seeks to manage risk by searching for investments with the minimum long-term potential to return three times the reward for the risk assumed.

It evaluates all forms of potential investments: equities and fixed income (domestic/foreign); preferred stocks (convertible/straight); commodities; exchange traded funds (ETFs); precious metals; MLPs and GPs of exchange-listed energy infrastructure trusts; real estate investment trusts (REITs); venture capital; and private placements.

Terril’s disciplined approach helps to remove emotion from investment decision-making. It tends to buy when the price reaches a favorable risk/reward threshold, which can lead Terril to being lightly exposed to markets that it believes are over-valued. The firm’s independence also frees it to take profits in successful investments when peers fear being underinvested.

Targeted annual return goal

Year to year, Terril & Co. seeks to generate 3% to 5% real growth (over and above inflation, taxes and fees) in client portfolios. Historically, wealth managers who consistently deliver investment returns in this range are rated in the top tier of investors.

Terril’s standard for acceptable investment return differs markedly from that of industry-driven money managers. In a year when the S&P 500 declines 21%, those managers are pleased to report a 17% loss to clients.

Fee scale reflects total return sensitivity

Conscientious cost control and an equitable fee structure help boost the net return to clients. Fees, calculated and billed quarterly, are entirely negotiable. Terril does not bill in advance. An advisory contract can be cancelled at any time without penalty.

The firm derives 100% of its revenue from client fees. It does not charge or accept any type of commission or other compensation for the sale or purchase of securities.

Fee scale

Market value of managed assets Annual fee as a percentage of managed assets
Up to $1 million 1.0%
$1 million to $3 million 0.75%
$3 million to $5 million 0.6%
$5 million and above 0.5%

*Illustration: Presuming the negotiated fee to manage a $1 million portfolio is 0.75%, the cost to the client is $7,500 on an annual basis. If a client can earn 5% self-managing a portfolio, Terril & Co. needs to earn 5.75% to justify its involvement.

Clients receive an easy-to-understand, two-page investment performance report every quarter. The report clearly presents eight key financial metrics.

  1. Current total value of assets in portfolio
  2. Current asset allocation (expressed as a percentage of total portfolio)
  3. Bond call/put information and maturities
  4. Accrued dividends and interest
  5. Deposits and withdrawals made during the quarter
  6. Portfolio gain or loss during the quarter (expressed in U.S. dollars)
  7. Five-year history of quarterly rates of return (deposits and withdrawals time-weighted)
  8. Annual rate of return (after four quarters)

If your performance report sparks a question, please call. Your call will be answered by one of our professionals who is eager to help.

Terril also welcomes client meetings to discuss investment performance and strategy.

To review a sample quarterly report, click here.

Quarter Ending December 31, 2017
Equities 46.02%
500 Biogen Inc. 159,285
1,750 Rio Tinto PLC 92,628
2,000 Bristol-Myers Squibb Co. 122,560
2,200 Citigroup Inc. 163,702
4,000 Plains GP Holdings L.P. 87,800
6,000 Bank of America Corporation 177,120
10,000 ClearBridge Energy MLP Opportunity Fund 118,000
Taxable Fixed Income 36.08%
25,000 Aberdeen Asia-Pacific Income Fund 124,500
3,500 Ally A FLT 6.4022% 90,825
140 US Bancorp Series A Pfd FLT 3.5% 126,000
150 State Street Cap Trust IV Pfd FLT 1.96344% 135,188
150,000 Int'l Lease Fin FLT 4.67% 12/21/2065 146,250
100,000 NetApp, Inc. 2% 09/27/2019 99,232
Tax-Free Fixed Income 5.79%
95,000 Chicago Water Rev 5.25% 12/1/2032 115,900
Other 3.34%
50 Ounces Gold 66,750
Cash Equivalents 8.77%
100,000 United Technologies Corp 1.778% 05/04/2018 99,910
Bank Trust Department Money Market 71,865
Accrued Dividends Earned 2,127
Accrued Interest Earned 1,177
Accrued Tax-Free Interest Earned 416

CURRENT TOTAL $2,001,235

Deposit 12/04/2017 $3,000
Balance 9/30/2017 $1,963,852
Gains from Investment** $34,383
*Abraham Lincoln Family Trust is a fictitious name being used to conceal the identity of an actual client. The composition of the portfolio is representative of a typical “balanced” account managed by Terril & Co.
** Gain or loss from investment is net of any fees and includes the reinvestment of earnings.
Five Year Performance
Abraham Lincoln Family Trust ^
December 31, 2017
Quarter Ending: 2013 2014 2015 2016 2017
March 6.86% * 2.55% * 1.20% * -4.38% * 3.31% *
June 1.66% * 4.81% * 0.91% * 2.48% * 1.88% *
September 0.50% * 0.95% * -7.37% * 4.79% * 2.19% *
December 3.91% * -2.31% * -1.05% * 5.87% * 1.75% *
Annual 13.45% * 6.00% * -6.40% * 8.71% * 9.44% *

First performance reported March 31, 1988.
* Taxable Equivalent

2012 10.91% * 2007 5.65% * 2002 3.21% * 1997 13.76% * 1992 9.93%*
2011 -1.19% * 2006 9.33% * 2001 8.56% * 1996 7.02% * 1991 20.55%*
2010 17.06% * 2005 1.56% * 2000 23.88% * 1995 13.90% * 1990 8.04%*
2009 23.55% * 2004 2.41% * 1999 0.56% * 1994 0.36% * 1989 16.36%*
2008 -1.42% * 2003 15.11% * 1998 -1.65% * 1993 4.08% * 1988 5.05% *

^ Abraham Lincoln Family Trust is a fictitious name to protect the confidentiality of an actual client.

** The investment returns presented above are the actual results attained by Terril & Co.in managing a retirement plan with assets of $5-$10 million. Returns are net of any fees and include reinvestment of earnings. The client has a “balanced” investment objective. Results were achieved utilizing the following asset ranges: equities 0-50%; fixed income 15-95%; cash equivalents 0-80%; and other 0-10%. Terril & Co. believes the sample is indicative of its average performance over time. However, positive results are not guaranteed. Future results may be materially different. It is possible for clients to lose money.

Written Blog: Thoughts on the Economy

Tuesday, May 15, 2018

Year to date the U.S. stock market is unchanged. The bond market (fixed income) is down approximately 3%. Our belief is that by the end of 2018 stocks will be 3 to 5% lower and bond funds will be 10% lower. The main reason for this outlook is the probability that interest rates are going higher in the U.S. The budget deficit for the U.S. is moving up to the ONE TRILLION dollars per year level. With this new money demand, plus rolling over maturing debt, the markets will demand a higher interest rate to buy the debt. Couple this with inflation moving higher and the Fed’s intention to decrease the size of their balance sheet and it points to higher interest rates.

We remain positive on energy issues as the demand world-wide for oil continues to increase. Banks should also do well in an increasing interest rate environment. Major pharmaceutical stocks are also reasonably priced for investment. What is grossly over-priced is big technology companies. Particularly the ones losing money and burning cash such as Tesla and Netflix. Amazon generates cash and owns a profitable cloud computing division. The balance of the company, including home delivery, burns cash. The price of the stock is much too high. Bonds and other fixed income investments are a potential disaster. From such current low- low -low levels of interest rates, there will be major reductions in principal values as rates move up. In Europe, interest rates reflect a market controlled by the European Central Bank. When the Central Bank steps aside of the market price discovery will return. The level of interest rates the market will demand is much higher than current level. Two-year Greek bonds, (yes, the same Greece that was and is on the verge of bankruptcy), currently yield less than similar U.S. issues. Does anyone believe the credit of Greece is better than the credit of Uncle Sam? German credit is excellent. However; their ten-year bonds trades will a yield of only 5/8 of 1 %. Historically it trades more in line with U.S. debt currently 3.08%. There is a major price revision waiting when the market begins to set the rates.

Our floating rate bonds are performing well. We continue to expect movement towards this structure. We also favor gold mining stocks of major producers. The spread between the cost of production and the cash price of gold is at historic levels. Thus, gross profit is high.


Terril in the News

2/11/2018 1:56:31 PM

In a story about the silver lining aspects of 2018’s thunderous stock market correction, St. Louis Post-Dispatch financial columnist Dave Nicklaus credits Joe Terril with making a prophetic call on the market turn months before it occurred. He also shares Terril’s intimations about the high potential for future market drops, with stocks still in the early stages of a fundamental re-valuation process.

Joe Terril

Articles Terril in the News

Client Security/Privacy

Terril applies physical, electronic and procedural safeguards that meet industry standards for client security. It does not warehouse sensitive data (such as social security numbers) in its firewall-protected computer network. Its office is video-monitored 24/7.

All client communication, including your name, contact information and questions, is kept strictly confidential and made available only on a “need to know” basis to members of our staff. Click here to read our privacy policy.

Registered with SEC

“Terril and Company” is the operating name for Terril Brothers, Inc., an SEC registered investment advisor and a corporation wholly owned by John “Joe” Terril. Click here to view a copy of the firms SEC registration. If you would like a paper copy of the firm’s registration statement, please call.