Investments

Mission Statement

The investment account was created to provide a permanent resource to help sustain the mission of the Montgomery County Road Runners Club (MCRRC).  The account will incorporate features that allow flexibility in response to the ever-changing needs of our work.  The investment policy will consider not only short-term cash needs and cash flows approved in the annual operating budget, but also longer term needs reflected in the strategic plan.  The policy will be administered with the goal of earning a reasonable return on MCRRC’s funds without undue risk.  .

Investment Policy

The Finance Committee will be responsible for administering this Investment Policy and Guidelines. The Finance Committee will make investment recommendations within the parameters of this Policy and Guidelines as established and reviewed on a periodic basis and will facilitate the initiation of investment transactions.  The investment transactions will be governed by Article V of the Bylaws and will require the signature of two officers or board designated individuals.

Investment Guidelines

A diversified portfolio of cash reserves, fixed income, and optionally equity investments (“Portfolio Assets”) will be maintained by ascertaining that:

The Finance Committee will not invest assets in venture capital companies nor in securities of companies which have not been in existence for a sufficient period of time to develop a track record allowing a prudent investor to determine their probable worth.  No investments will be made in letter stock, private placements, short positions, margin positions, commodities, oil and gas exploration contracts, or any further speculative investment.

The Finance Committee and the Board recognize that capital markets are dynamic and any statement of guidelines and objectives prepared at any one time may not be totally appropriate, applicable or meaningful at various times in the future.  Moreover, the portfolio mix will fluctuate as the markets fluctuate, and therefore, the portfolio mix may fluctuate outside of the guidelines set forth herein on a short-term basis. Whenever a committee member believes that a particular guideline is too liberal or too restrictive, or should be altered or deleted, it is the responsibility of the member to initiate contact with the Board of Directors.

The Finance Committee and Board will not be held accountable for investment fluctuations which may occur.

• No more than 20% of the Portfolio Assets will be in common stock or common stock equivalents (i.e., equity mutual funds or commingled funds). 
• The shares of small- and mid-cap stocks will comprise no more than 15% of the equity holdings.
• No less than 85% of the equity holdings will be in large-capitalization (e.g., blue-chip/NYSE) stocks.
• Up to 15% of the equity investments (aggregate of small-, mid-, and large-cap stocks) may be invested in international stocks.
• No one industry will represent more than 20% of the portfolio.
• Any equity mutual fund investments will generally be in no-load funds without 12(b)1 fees that maintain an expense ratio consistent with similar investment styles as measured by Lipper and/or Morningstar rating services.
• No less than 20% of the Portfolio Assets will be in fixed income investments. 
• No more than 10% of the fixed income holdings will be long-term (maturity of more than 10 years). 
• No less than 90% of the fixed income investments will be in Intermediate (2-7 years) maturity and /or short-term (6 months to 2 years) maturity.
• Bonds selected for purchase will have an “A” rating or better based on Standard & Poor or an equivalent rating service.  Any security falling below an “A” rating will be sold as soon as deemed prudent.
• Cash reserves (0-6 months maturity) will normally not exceed 60% of Portfolio Assets over an extended period of time, subject to any conflicting requirements to maintain sufficient liquidity to responsibly maintain operating requirements.  The aggregate balance of checking accounts, savings accounts, money market deposit accounts, and time deposit accounts such as certificate of deposits held at any one financial institution will normally be less than the FDIC insurance limit (which is $250,000 as of May 2011).
• No one holding, other than the Federal Government securities, its agencies, FDIC, or FSLIC insured deposits, will constitute more than 20% of the market value of the portfolio.