Saving and investing is important to protect your current life and prepare for the future. For many people, this is the most important part of financial-planning services. Our philosophy aligns with client goals in the following ways:
1. Prudent Management of Risk
It’s an unavoidable truth that all investing involves some degree of risk. Many people focus strictly on short-term fluctuations in value (market risk), but keeping up with rising prices (inflation risk) over time is critically important. Our task is to help clients achieve their objectives while taking no more risk than necessary. All funds are placed at a large independent custodian to provide ease of management and safekeeping for our clients. We’re able to consistently maintain asset allocation targets through our monitoring software.
2. Sound and Justifiable Approach
All investment decision-making should hold up to the most current academic studies, empirical data and every-day common sense. Our investment strategy is an “evidence-based” approach incorporating decades of rigorous peer-reviewed research from top universities and practitioners. There will always be a well-thought-out reason and rationale behind everything we do. We are proud to be a DFA Approved firm and use many of their funds (DFAUS.com). Watch the video below to learn more.
3. Focus on Costs
Taxes and expenses have an unquestionable impact on investment results. They also happen to be two areas where we have considerable control. As a result, we focus on both intently and strive to minimize their effects and costs. We use a combination of low-cost institutional funds, mutual funds, ETFs, and bonds to implement investment strategies.
4. Tax Efficiency
We incorporate sophisticated software that allows us to consistently monitor:
Tax Harvesting Opportunities
“Booking” the losses on paper to allow tax savings.
Location Optimization
Analyzing your “buckets” (taxable, tax-deferred, or tax-free Roth) to determine which asset classes (i.e. US stock, international stock, bonds) should go into which “bucket.” Research shows this can add up to .8% to your after-tax returns.
5. Asset Allocation and Diversification
Investing would be quite simple with perfect foresight. Simply pick the single investment that will do best in the future! Unfortunately, we all know it’s not that easy. The future is unknowable and should be treated as such. A portfolio should be structured to withstand whatever the future might bring, and proper asset allocation and diversification are the logical ways to approach an uncertain world. For our retired clients and those within five years of a known retirement date, we maintain a bond ladder to ensure they can withstand a bear market without a loss of income.
6. Valuation Matters
Markets can (and do) drift away from a reasonable estimate of long-term fair value, and the risk/return tradeoff can become distorted. When this happens, maintaining a static allocation to an asset class just isn’t logical. When warranted, we will adjust exposure to areas we consider to have an unfavorable long-term outlook. We are not market timers nor short-term traders, and we make no attempt to predict market tops or bottoms (or even direction). Our approach is based on valuation sensitivity, focusing on the long-term investment opportunity available for each asset class.
7. Transparency
While a “broker” at a brokerage firm is often limited to their inventory, as an independent advisory firm, we have “universal access” to funds. We, ourselves, invest in the same funds we recommend to our clients. Our goal is to limit expenses and only pay the additional expenses of active management when it has been proven to be of value over the long term.
8. Clear Mission
It's easy to become consumed by all the noisy distractions rather than to heed the quieter voices of reason. We'll help you stay "on task" when it matters most.