We believe that a consistent, disciplined approach to portfolio management offers the best chances for success. Because we are an independent financial services firm, we are not locked into endorsing particular stocks or mutual funds the way a large brokerage could be. As fee-based professionals, what we earn is based on a set percentage, so that as your portfolio grows, we benefit when you grow.
Our Investment Strategy
We believe in asset allocation. Studies have shown that asset allocation is the dominant factor in determining total portfolio return. We also believe that, as a general rule, the future cannot be predicted and neither can the direction of stock prices. Therefore, it generally makes more sense to build investment portfolios based on exposure to asset classes, rather than on the performance of individual stocks. We focus on fundamentals and avoid speculating on so-called hot stocks or mutual funds.
We believe in diversification. Studies have shown that diversifying investments can both reduce volatility (risk) and possibly raise the potential for investment returns. In an effort to achieve these objectives and achieve an appropriate level of diversification, we believe that investment portfolios should have a mix of asset classes (e.g. cash, large and small U.S. and foreign stocks, bonds of varying maturities and issuers, real estates, etc.). Ultimately, investments are generally intended to provide for certain future expenses. To meet these needs, the investment asset must be designed to grow over the long run and be convertible into cash when needed.
Therefore, as investment strategies are developed and specific investments selected, it is done with an eye on both 1) long-term growth and income potential, and 2) the ability to generate ready liquidity as circumstances warrant. Tax reduction strategies may also play an important role in these recommendations, depending on the client’s tax status and other financial circumstances.
We believe in Tactical Asset Allocation. Investopedia describes TAA as An active management portfolio strategy that re-balances the percentage of assets held in various categories in order to take advantage of market pricing anomalies or strong market sectors.
The goal of Tactical Asset Allocation is to:
1. Minimize Investment Losses
2. Participate in Advancing Markets
3. Move to Areas of Strength and/or Defensive Positions in Declining Markets
We select money managers who employ CFAs (Chartered Financial Analysts), engineers, CFP®s and other industry veterans for their strengths of stock picking and defensive trading so that we are constantly working for you to try to give your portfolio the best opportunity for long-term growth and income while attempting to protect your money from major losses along the way.
Tactical money management does not guarantee a portfolio from losses or assure a profit, but it does offer disciplined and time-tested investing with sell strategies in place from the date you enter the portfolio. By minimizing the losses, you do not have to ‘shoot for the moon’ to ‘recover’, which further increases your portfolio risk.
(Source Dalbar). Diversification and asset allocation strategies do not assure profit or protect against loss.
Our Compensation
For those clients making use of Portfolio Management Services, the fee is based upon the total assets under management. The specific services and compensation arrangements appropriate for each client, as well as appropriate disclosures, are documented in an agreement signed by the client prior to services being rendered. Investing involves risk. Depending on the type of investment, there may be varying degrees of risk. Investors should be prepared for loss, including total loss of principal. Asset allocation and diversification strategies do not assure profit or protect against loss.
