Investment Management

While it is easy to get caught up in the state of the economy or the latest “hot” stock or mutual fund, we believe passionately that the way you invest should be aligned with where you are in your life…not with the short-term ups and downs of markets.
We don’t believe that stock picking, market timing, and chasing the latest track record is good for anyone except Wall Street. Instead, we ask questions about your goals and time horizon, what’s important to you, how you feel when markets decline and the financial media is doing its best to rattle you.

Then, we construct your portfolio with a high level of diversification using Asset Class investing, which believes in owning securities from thousands of different companies, across different industries, and across different geographies. Our typical client portfolio holds about 10,000 distinct companies. Asset Class investing is defined by selecting the securities that best represent an asset class, such as small or large companies, emerging markets, or international — instead of blindly following an index. In addition, we don’t make bets on single stocks, industries, regions or the economy. It is important to note that the funds that we use are institutional share classes not available at the retail level, very low cost, and academically constructed.

Understanding Risk and Your Time Horizon

We start the process by understanding your risk tolerance and how much risk you need to take in order to achieve your financial goals. We value transparency and trust and recognize that there is no “one size fits all.” During this time, we make sure to understand how you truly feel about the market and your experience.

Creating Your Portfolio

Next, we find the allocation of stocks and bonds that best fits your risk tolerance and allows you to achieve your financial goals. We also plan for market declines, by building that expectation into the portfolio, creating a “war chest” to rely upon while you are waiting for the market to recover so that you do not have to worry about the market. Through our partners, Loring Ward and Dimensional Fund Advisors, we use portfolios based upon time-tested and Nobel Prize-winning academic research and a growing body of knowledge that shows the advantages of a well-diversified portfolio, as opposed to stock-picking and market timing, which is unreliable. It is at this point that we create a personal investment policy statement (IPS).

Monitoring and Rebalancing

Each year, we test your portfolio allocation model to your unique financial plan to ensure you are taking the least amount of risk to achieve your goals and according to your risk tolerance, which may change over the years.

A good investment plan is like the navigation in your car: it tells us when we’re off course. And as an investment portfolio grows, certain assets might grow faster than others and can begin to increase the risk of the portfolio. Rebalancing your account sells from the assets that have grown faster and buys those that are cheaper. But how often is enough? We don’t believe in frequent trading and the body of research on this subject has found that more activity in your account doesn’t necessarily result in better risk adjusted returns, and often results in higher taxes. That’s why we only rebalance portfolios that experience “drift” on a quarterly basis, favoring discipline over frequent trading.