Our Process
In a series of face-to-face meetings we seek to understand your investment goals, whether it is a comfortable retirement, a predictable stream of income, leaving a lasting legacy, or some combination of all of these.
Through a disciplined process, we help you identify your personal tolerance for asset price fluctuations. This is crucial, because to achieve long-term goals you must be able to ride out market fluctuations throughout your entire investment period.
The end result of this collaborative process is an Investment Policy that specifies a personal risk profile, and also provides a roadmap for implementing an investment strategy. Your Investment Policy takes into account your own facts and circumstances (e.g., unrealized gains of existing holdings), tax characteristics of your accounts (i.e., taxable accounts and/or tax-deferred retirement accounts), and investment preferences (e.g., socially responsible investing criteria).
Implementation
We add value by applying certain core beliefs to implement client investment plans.
- Broad diversification. A single asset class cannot match the performance of a well-diversified portfolio when evaluated against risk. A diversified portfolio will have less volatility over extended periods of time. We believe in a broadly diversified portfolio representative of the global opportunity set—Equities: U.S., Foreign Developed Markets, and Emerging Markets; Fixed Income: primarily short- and intermediate-term; and Alternatives: Real Estate and Commodities.
- Harvesting market rewards. Understanding the expected rewards that different markets offer is central to long-term investment success. Historical data suggest that for a number of the major asset classes, higher risk comes hand in hand with higher returns—the most notable being that large stocks provide an equity premium over bonds in the long run. On the other hand, market rewards involve the courage to invest in the unpopular, unloved, and out of favor, with patience to stay the course. One of the more common investor mistakes is chasing returns by investing in what has been most successful in the recent past.
- Eliminate unnecessary expenses. Eliminating unnecessary expenses is the most reliable path to higher returns. Investors can reduce expenses by investing in funds with low fees and low turnover. The best way to reduce fees and turnover is to use passively managed index funds and exchange traded funds (ETFs). We also can reduce expenses for taxable investors by harvesting short-term capital losses and postponing short-term capital gains.
- Tax-efficient investing. We add value through tax-efficient investing, which can be thought of, generally, in terms of “asset location” and smart withdrawal strategies. Asset location is typically defined as placing (or locating) assets in the most tax-advantageous account type (i.e., placing assets primarily generating interest and dividend income in retirement accounts, and placing assets primarily generating capital gains taxed at more favorable rates in taxable accounts). When thinking about smart withdrawal strategies, it usually makes sense to withdraw monies from taxable accounts first and allow tax-deferred accounts (e.g., IRAs or 401(k)s) to continue growing.
Monitoring and Ongoing Supervision
We continuously monitor your portfolio, making adjustments consistent with your evolving circumstances, and changing market conditions. We communicate through regular reporting and face-to-face meetings. Additionally your portfolio can be viewed through a secure online portal, with account data updated daily.