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.

Sample
QUARTERLY REPORT
ABRAHAM LINCOLN FAMILY TRUST *
Quarter Ending March 31, 2022
Equities 56.35%
500 Qualcomm Inc. 76,410
1,000 Merck & Co. Inc. 82,050
1,400 Bristol-Myers Squibb Co. 102,242
1,500 Newmont Mining Corp. 119,175
1,750 Delta Air Lines, Inc. 69,248
1,750 Verizon Communications 89,145
2,000 Nutrien Ltd. 207,980
2,200 Marathon Petroleum Corp. 188,100
3,000 Vistra Electric Group 69,750
3,500 Cleveland Cliffs Inc. 112,735
8,000 Plains GP Holdings 92,400
TAXABLE BONDS 26.86%
140 US Bancorp Series A Pfd FLT 3.5% 110,600
1,700 JP Morgan Ultra Short Income 85,459
8,200 Crestwood Equity Partners LP 9.25% 78,720
25,000 Aberdeen Asia-Pacific Income Fund 84,500
100,000 General Mills Inc. FLT 1.24914% 10/17/2023 101,175
150,000 Int' Lease Fin FLT 3.23% 12/21/2065 115,875
Other 4.59%
50 Ounces Gold 98,406
Cash Equivalents 12.21%
Central Tst & Inv. Money Market Fd 157,680
100,000 Ford Motor Credit Co. FLT 1.38271% 08/03/2022 100,025
Accrued Interest Earned 662
Accrued Dividends 3,631

CURRENT TOTAL $2,145,967

Deposit 3/22/2022 $3,000
Balance 12/31/2021 $2,016,703
Gains from Investment** $126,264
*Abraham Lincoln Family Trust is a fictitious name to protect the confidentiality of an actual client and is representative of a typical account that Terril & Company manages with a balanced investment objective.
** Gain or loss from investment is net of any fees and includes the reinvestment of earnings.
Five Year Performance
REVIEW BY QUARTERS**
Abraham Lincoln Family Trust ^
March 31, 2022
Quarter Ending: 2018 2019 2020 2021 2022
March -.87% * 7.59% * -23.25% * 9.59% * 6.26% *
June -0.46% * 1.55% * 12.48% * 3.03% *
September 0.45% * 1.52% * 3.45% * -2.32% *
December -10.72% * 5.90% * 11.26% * 3.21% *
Annual -11.51% * 17.46% * -0.64% * 13.83

First performance reported March 31, 1988.
* Taxable Equivalent

2017 9.44% * 2012 10.91% * 2007 5.65% * 2002 3.21% * 1997 13.76%* 1992 9.93%*
2016 8.71% * 2011 -1.19% * 2006 9.33% * 2001 8.56% * 1996 7.02%* 1991 20.55%*
2015 -6.4% * 2010 17.06% * 2005 1.56% * 2000 23.88% * 1995 13.90% * 1990 8.04%*
2014 6.00% * 2009 23.55% * 2004 2.41% * 1999 0.56% * 1994 0.36%* 1989 16.36%*
2013 13.45% * 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 above performance are the actual results of a $5-$10 million retirement plan under our management, is net of any fees and includes reinvestment of earnings and is managed with a balanced investment objective; results were achieved with the following asset ranges: Equities 0-50%; Fixed Income 15-95%; Cash Equivalents 0-80%; and Other 0-10%. We believe the above to be indicative of our average historical results. However, such results are not guaranteed. Future results may be materially different. It is possible for accounts to lose money.

Written Blog: Thoughts on the Economy

Monday, August 15, 2022

Recent news leads some investors to believe the economy is already in recession. Couple this with the misinterpreted news that inflation is now under control, and you have the foundation for a rally in both stock and bond prices. We are enjoying the rally but doubt it will last. The economy is not in recession. Unemployment is at all-time low, average hourly earnings are higher and retail sales are resilient. This is hardly the figures of a recession. Inventory adjustments at businesses are historically volatile. This past quarter showed business reluctant to pay higher prices for inventory. This can only last for a certain length of time. Ultimately inventories must be rebuilt or go out of business. Inflation figures no question, showed improvement. A drop from 9.5% to 8% is an improvement. The thoughts of many analysts that inflation is quickly dropping back to the Fed’s 2% target rate is folly. Inflation is stubborn. Housing costs are yet to fully work their way through the figures. Rents are strong and going higher. Mortgage rates are high. Prices of homes, off their highs, are holding up. Housing represents approximately 33% of the inflation calculations. The cost of labor is in the early stages of increasing. With unemployment low and the labor force not increasing, it is unlikely the cost of labor will fall. In fact, it will continue to increase. Don’t be fooled by last month’s report. More workers at lower paying jobs held down the average cost. Energy prices fell last month from the release of millions of barrels of oil from the government strategic petroleum reserve. The fall in price distorted the inflation figures. The release will end by October. Energy prices will then go back to trading upon supply and demand dynamics. In our opinion, the most important ingredient of future inflation is reducing the growth and size of the money supply. The Fed is not addressing this issue. They believe inflation can be reduced to their 2% target by simply raising interest rates. We doubt this. This supports our outlook for inflation to stay stubbornly at the 5% to 6% level for another 24 months until the Fed drains liquidity (printed money) from the banking system.

Financial stocks were battered during the recent market downturn. They have since recovered somewhat. We believe the outlook for bank stocks is bright. They are a beneficiary of higher interest rates. They are also a major benefactor of technology. Their costs of acquiring deposits are much lower. With reasonable loan demand their net interest rate margins will expand nicely. Their charge offs for bad loans are negligible. Consumer debt, credit scores and ability to pay debt is at a high. With our outlook for a strong economy and continued wage growth, this element of banking will remain positive.

The bond market rally is muted. Yields are slightly lower. We urge investors to stay with short (18 months and less) durations. Yields in this area are at yield curve highs. In our opinion the risk of extending maturities outweighs the potential reward.

We remain bullish on commodity prices. Recent price pullbacks are just that, pullbacks. We see gold prices and agriculture prices returning to recent highs.

PAST THOUGHTS


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. “Click here to read Form CRS”. If you would like a paper copy of the firm’s registration statement, please call.