FINANCIAL PLANNING

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Our investment process for individual investors is underpinned by four enduring principles: broad diversification, a systematic, “open architecture” approach to investment selection, low costs and tax efficiency.

Diversification has been called the only free lunch in investing, because the risk reducing benefit of diversification is a matter of fact, grounded in mathematics and statistics. We consider an expansive view of asset classes and may incorporate alternative strategies such as commodities, foreign currency, real estate, and other forms of non-traditional beta. Beyond asset classes, we diversify exposure of other types, such as asset type, geographic market, fund and manager. But diversification is not just about risk reduction; it’s about capturing opportunity. Investment research conducted over several decades suggests that the vast majority of returns available from investing can be captured through asset allocation. We incorporate this research into our portfolio construction process, maintaining strategic exposure to a broad array of asset classes rather than attempting to pick winners and losers.

Open architecture means more options for investors. We are an independent, fee-only investment advisory firm with no bank or insurance company affiliation. We do not charge and will not accept any brokerage commission, trailer or compensation of any kind for selling a particular fund or product to advisory clients. This independence ensures that our interests are aligned with our clients’; our sole focus is to provide investment solutions that meet your needs, which may include index funds, diversified mutual funds, separately managed accounts, futures, ETFs or other securities.

Beyond the freedom to choose from the full array of investment alternatives, we utilize a systematic approach in selecting investments and managers. We search for persistent sources of alpha rather than for managers with a “hot hand,” since today’s top performers often underperform in subsequent years. When we identify an opportunity to add value to a portfolio, we look for alternative ways to implement the idea more cheaply, with more liquidity and less risk. Because we are not locked into a proprietary platform, we can offer a broad array of solutions across products and markets.

Costs are a drag on portfolio returns. Active management fees are often four or more times the cost of index funds or ETFs, yet most active managers perform worse than their benchmark index. So what are investors paying for? We always considers the impact of transaction costs, management fees and other expenses in determining which investments to select. Low-cost, highly-diversified investments such as Vanguard index funds, iShares ETFs, and index futures form the core of our portfolio strategies. If we do not think we can offer value that is significantly greater than the cost of our services, we will advise you accordingly. This is our commitment as a fiduciary.

Tax-efficiency is perhaps the most important benefit that an advisor should bring to the management of a client’s portfolio. The importance of tax planning and mitigation strategies has never been greater than it is today. Taxable investors do have effective methods for deferring or reducing investment and estate taxes, but most individuals and many advisors pay only cursory attention to the tax-efficiency of their overall investment strategy. We will help you take advantage of benefits that are available to you without any gimmicks or high-risk strategies.

If you would like to speak with an advisor, contact us at (888) 625 7768 or  (415) 315 9916. Or send us your contact information and we would be happy to schedule a call with you.