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

Thursday, July 19, 2018

The investment climate has changed in the last few months. No longer is the world economy, inflation, interest rates and corporate profits front and center. The issue now is world trade. The current administration is attempting to use severe tariffs (a tax on imported goods) to force other countries to change their policies on world trade. The response so far is retaliatory. Other countries are imposing tariffs. Said plainly, when two parties both increase the cost of doing business, the result is less business. If the “trade war” escalates there is a high probability that the world economy slows dramatically. At days end, there are no winners in a trade war.

For decades, individual nations have protected the business entities in their country. This includes the U.S. Subsidies to farmers and the agriculture industry are just one example of U.S. protectionist policies. Major tax credits and incentives for the high-tech industry are another. In recent years, by mutual agreements with participating members, including the U.S., the world trade organization has granted advantages to certain countries. From time to time the need to make changes in the world system are negotiated. It appears this methodology is now to be abandoned in favor of instituting severe tariffs to force trading partners to “do as we say.” If the trade situation worsens it will be a major impediment to investments. We hope calmer approaches will prevail.

For perspective, we offer these observations.

  1. Running a $25 billion trade deficit with country X doesn’t mean the U.S. lost $25 billion. We received $25 billion of goods and services we wanted. It was a value for value trade. Country X gave us one type of asset and we gave Country X another.
  2. It is impossible for us to run a balanced trade account with poorer countries. The U.S. is 40 times as rich as Mexico. How can they possibly buy as much from us as we buy from them? A big part of this deficit is tourists traveling to Mexico. Are we to hurt U.S.-based airlines because Mexico’s citizens aren’t coming in equal numbers to tour New York, Chicago or Nashville?
  3. Where is the evidence of the problem? We have run trade deficits with the balance of the world for over 30 years. Yet the standard of living in the U.S. is the highest in history. Unemployment is historically low at 4%. The economy is growing nicely and even gaining momentum. Interest rates and inflation are low. The U.S. dollar is strong.
  4. We run trade surpluses with most countries in services such as banking, insurance, hi-tech consulting etc. Those surpluses are not reflected in typical trade deficit calculations
  5. The xenophobic rhetoric we now hear about China is a repeat of what was said in the late 1980’s and early 1990’s about Japan. What happened to the economic takeover of the U.S. by Japan because of our huge trade deficits?
  6. What IS a problem? Our ballooning BUDGET deficits! Countries that perhaps would buy more U.S. goods and services end up buying our Treasury bonds instead. We voluntarily give them an incentive to buy our bonds rather than our products.

If the trade war worsens, we will turn bearish on stocks and bullish on high quality fixed income. If the trade war is averted, our outlook is the opposite.


Terril in the News

8/3/2018 3:34:43 PM

As Facebook learned last week the law of gravity still applies to some high-flying tech stocks...

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.