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

Friday, July 1, 2022

The current debate on Wall Street centers on the potential for a recession. Many pundits are claiming we are already in a recession. Many more are predicting a severe recession before year end. Holding this belief enforces their thinking that inflation is going to fall back to a 2% level. With inflation this low, the thinking proceeds, interest rates are not going higher and will begin falling by year end. In a two-word response we describe this logic as “highly doubtful”. Wall Street is not Main Street. There is no question Wall Street is in a recession. Perhaps a severe recession. Markets are sharply lower. Bonuses are down, investment banking fees are non-existent. Assets under management are falling. Summer Rentals in the Hamptons are off sharply. The prognosticators working in this environment tend to assume their personal experiences must be what is going on all over the country. The New York media often follows this crowd. Current reporting on the economy is tilted.

Facts on the economy show employment is strong. Job creation is strong. Wages are moving higher. There is pent up demand for autos, travel, computer chips and services. Recent durable goods orders show strength across the board. The June ISM services index showed growth in all 18 categories. Manufacturing indexes recently released are showing growth. These are not the signs of a recession.

The outlook for inflation to fall back to the 2% level is based upon the mistaken Keynesian theory of a recession lowering commodity prices. It fails to address the recent 43% growth in the M-2 money supply. This money printing is the root cause of inflation. Until the Federal Reserve Bank removes much the excess reserves created over the last 24 months, we doubt inflation will make an exit.

Interest rates are a function of inflation. To deal with higher inflation the Fed must drain reserves. If inflation stays elevated, the Fed will be forced to “raise” interest rates higher than current expectations. We strongly disagree with any theory the Fed will be “lowering” interest rates by year end, or early next year. Keynesian belief that 2.25% interest rates will discourage 8.5% inflation is suspect. Labor inflation and housing inflation are beginning to work their way into the CPI. We don’t see this changing anytime soon.

The bond market follows interest rates. Higher rates, lower bond prices. The first half of 2022 is the worst bond market performance in over a hundred years. This is with interest rates at only 3% on a ten-year government bond. A move higher in the rate will continue the bond market rout. Better to keep fixed income maturities short to avoid further pain and suffering.

Our outlook for a strong economy doesn’t flow through to a good stock market. History shows several diversions between the two. Higher costs of doing business will hamper corporate profits. Businesses face higher labor costs, higher transportation costs, higher energy costs and especially higher costs of capital. We are cognizant of the profit benefit over the last ten years of companies re-financing debt at lower and lower levels. Stocks sell at a multiple of earnings and cash flows. Flat to lower earnings with higher interest rates leads us to believe prices stock prices will continue to fall.

While our current (and past 18 month) outlook for stock and bond prices is bearish, we see excellent buying opportunities occurring later this year, or early next year, when prices are lower. Wall Street will overcompensate to the downside when their predictions of recession etc. fail to materialize.

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.