Investment Strategies Uniquely Tailored For You
Combined with wise financial planning advice, a sound investment philosophy helps to fuel your ongoing financial success and security. What we believe about investing can help you achieve your financial goals.
Investing is not a competitive sport. Instead, our approach to portfolio management ignores the narrow approach of attempting to beat the performance of the index that happens to be “hot” at the moment. Neither does it attempt to time the movements of the financial markets. Instead, we apply a disciplined and evidence-based approach to design an investment strategy which is crafted to reflect your unique goals and temperament so as to give you the greatest likelihood of achieving your lifetime financial goals. This culminates in the creation of an Investment Policy Statement tailored to your unique situation.
How do we determine your investment objectives?
Your investments are the means to accomplishing your goals; they are not ends in themselves. Our planning work helps us to understand both your present and future financial needs. We then determine how your investment assets will need to perform to achieve your goals. We also believe you should know the amount of risk that is necessary to accomplish them. With this in mind, you will be in the best position to make informed decisions about the trade-offs between short-term volatility and your long-term financial security and well-being that are most appropriate and best suit your temperament.
How do we design your investment portfolio?
Once we have established the objective(s) of your portfolio(s), we determine the combination (or allocation) of investment categories (or asset classes) that seems most likely to achieve the objective(s) of your portfolio(s). We also attempt to minimize the amount of volatility you will experience along the way. This allocation is governed by your objectives; it is also influenced by your personal income tax situation and our analysis of current economic conditions, market valuation levels and specific areas of financial markets that appear particularly attractive, either because of the opportunities they present or their undervalued price levels.
How do we select investments given your portfolio’s objectives and allocation?
Investment expenses matter a lot. Any amount saved means that much more for you. Fortunately, they can be kept quite low. This is our preference except for those cases where a more-costly ‘active manager’ or stock-picker has demonstrated that their ‘skill’ is more than worth paying for compared to a relevant benchmark. Even then, expenses can be reduced through our use of lower-cost institutional-class holdings. Income taxes matter as well. After all, it’s not just what you make; it’s what you get to keep. Where a specific asset is located in your overall portfolio affects can impact your tax bill in surprising ways, both this year and over the longer-term. Each individual investment plays a specific role in your overall portfolio and is located in a certain account of yours for a specific reason. We use a disciplined approach to evaluate, select and monitor each investment asset. When evaluating an ‘active’ fund manager, we consider their tenure, consistent application of their investment philosophy, shorter and longer term returns as well as volatility relative to appropriate benchmarks.
How do we manage your portfolio with discipline and an eye to the future?
Countless studies demonstrate that human behavior is often detrimental to the investment results you need to achieve your goals. In fact, two psychologists shared a Nobel Prize in Economics for their work in this area. Other research presents compelling evidence that paying attention to market valuation levels can make a material difference in your portfolio’s performance whether measured by long-term return, short-term volatility or the amount you can withdraw sustainably. Our investment process helps us to guard against these pitfalls and to take advantage of such evidence-based research. It guides us as we evaluate your portfolio’s overall allocation and its specific holdings to determine any changes that should be made. These changes are influenced by the conditions at hand as well as the emergence of trends that are likely to impact the future. When we believe change is warranted, we communicate this and the thinking behind it to you clearly and succinctly. For our clients who have given us discretion to do so in accordance with their Investment Policy Statement, we promptly make the necessary trades.
How do we report your portfolio’s performance to you?
After each calendar quarter (March 31st, June 30th, September 30th and December 31st), we send you a Portfolio Performance Report that contains:
- Our concise and timely Portfolio Commentary describing the past quarter’s economic and investment climate as well as our outlook for the future
- A performance report for the year-to-date as well as over the longer-term
- An illustration of your current asset allocation and specific portfolio holdings
- A breakdown showing how your advisory fee was calculated
Our Investment Management Process