Face to Face: Deborah L. Koch, Co-manager of the Northern Mid Cap Growth Fund and the Northern Technology Fund

With Northern Trust: I currently co-manage the Northern Mid Cap Growth Fund. On July 31, I added co-managing the Northern Technology Fund with George Gilbert to my duties.

Starting on the right note: I grew up studying music and started college as a piano performance major. Little did I know how useful my music background would become.

Education: B.S., finance, University of Rhode Island; and M.B.A, DePaul University.

From preludes to portfolios: Most pianists don’t wind up co-managing a $260 million growth portfolio, but the progression is actually quite logical. During my first year of college, I recognized that my stage fright didn’t bode well for a performing career.

What I most enjoyed was music theory, which involves a lot of math. It’s all about fractions, ratios, intervals and analyzing patterns and progressions. I also enjoyed algebra and calculus for the same reason. Finance seemed like a natural fit, so I became a business major. Analyzing a company’s stock isn’t that different from analyzing a symphony or a sonata.

The tech beat: I started my career as a research analyst. Eventually, I co-managed technology funds for Scudder Kemper Investments and then Strong Financial.

Mid-life companies: Moving to a technology-heavy mid-cap fund at Northern Trust extended my range yet still made use of my 17 years of tech experience. As a technology investor, I love the idea of growth, which is what you want to find in the mid-cap range. Here, companies have recovered from their start-up pains and differentiated themselves but haven’t grown large enough to be burdened by bureaucracy. It’s a seminal period in the business cycle.

Math matters: My analytic background definitely influences the way I choose stocks. My approach is math-driven. I use formulas to identify the highest quality companies in the healthiest sectors of market. How fast is earnings growth accelerating? What is the valuation based on earnings’ prospects?
 

Gauging the tempo: In today’s volatile economy, we’re looking for stable rather than explosive growth. Consistency is more important than acceleration. For example, we have expanded our holdings in data-processing service stocks, where revenue is based on long-term contracts.

High notes: Two areas look promising now: semi-conductor equipment and software development. U.S. companies are spending money on financial, human resources and customer-facing software systems. In particular, we see room for growth in software to automate supply-chain management.

Play over time: I always advise individual investors to think in a 12- to 18-month horizon. Choose stocks that you believe in and understand, then give them time. It’s easy to make a decision then second-guess yourself. You can get whipsawed if you move in and out too quickly. You can only be right or wrong in any choice. Timing is what counts. If you are right in the long term, it’s OK to be wrong now.

Diversion is the best medicine: I manage the stress of my job by knowing when to get away from it. I do something physical like gardening, taking a vigorous two-mile walk or even cleaning the garage. I do yoga three or four times a week, as well. My husband and I also enjoy taking in the activities of our four children, who are involved in soccer, dancing and, yes, music.

After hours: I still play the grand piano I bought with my first bonus. My favorite composers are Bach, Beethoven and Elton John—all rigorous and mathematical in their compositions.