What should you know about our Investment Philosophy?

A consistent investment philosophy creates a framework for mutual understanding between us and our clients about the investment advisory service to be provided and for the thought process behind our investment decisions.

We consider ourselves to be financial security advisors, not investment brokers.  We focus on balancing the client’s assorted concerns, with their need to satisfy the targeted financial objectives.  Our job is to help clients efficiently manage their specific financial situations and to stop them from making unnecessary mistakes.

We believe that a steady, risk appropriate approach to investing is the best way to reach your goals. By building portfolios targeted towards an acceptable range of volatility, our clients are less likely to deviate from the investment strategy when the markets inevitably have a downturn. We hope that by reducing “excess” risk in the portfolio, our clients will be able to sleep more peacefully at night feeling confident that their financial security is in good hands.

To begin the process, we take an inventory of our client’s investable assets, review their cash & liquidity needs, and discuss short and long-term goals. We develop an investment strategy to meet these goals, keeping in mind the client’s specific time horizon and risk tolerance level. Finally, we monitor all portfolios on a regular basis to ensure that the asset allocation and individual positions continue to be appropriate for the client’s ongoing situation.

Mutual funds and exchange-traded funds (ETF’s) are our preferred investment choices for implementing our philosophy.  Investments that are selected for inclusion in the portfolios should be in existence for at least three years, have a related performance history, or be tied to an established index before we will consider allocating funds to the investment. We also prefer to work with those fund companies with a history of consistency in management personnel.

Mutual funds and ETF’s also offer professional management and maximum diversification. A properly diversified portfolio is not subject to the same financial risk as owning an individual stock. A balanced mutual fund portfolio spreads risk among many stocks, industries and asset classes, which should lower the overall risk of a portfolio.

The portfolio risk is further reduced by properly blending a mix of equities, fixed income securities, and short-term cash positions.  The fixed income instruments provide for predictability of income and allow us to structure a portfolio to meet specific cash flow needs.

When cost-effective, we may include the purchase of certificates of deposit or short-term investment grade corporate bonds in place of, or in addition to investing in funds that hold a large basket of fixed income securities, thereby creating a “laddered” portfolio to better satisfy the coverage of reoccurring cash withdrawal needs.

We prefer that our clients allow us to execute investment transactions on a discretionary basis. Having discretion means that we are allowed to exercise investment discretion over a client’s account without first having to obtain the client’s consent.  This provides for increased efficiency to our operations, eliminates redundant and low value clerical or administrative type activities, and increases the time available to focus on servicing our client’s needs.

The foundation for this discretionary authority is based upon a mutually agreed upon set of investment guidelines documented by data included as part of the advisory agreement.  The guidelines are derived from discussions with the client as to an acceptable amount of downside risk, and the equity exposure that the client is willing to have within their portfolio.

There are times, however, when we will work with a client on a non-discretionary basis.  Here, the client must approve of a transaction before it is initiated. While it means that the client retains greater control over their portfolios and investment decisions, it can result in a longer amount of time incurred prior to execution of a transaction, due to timing delays or inefficient communications with the client.