Our Approach

We believe open and direct communication with our clients is an essential component to success. Financial planning is personal, so we often ask that our clients share with us many things that they don’t share with anyone but their family. We also do something which many find unusual; when necessary, we will spend time educating our clients about market behavior and market risk. We have learned over time that educating clients about the markets helps to ensure that we invest their assets in a manner that is congruent with their goals. Education is an essential step in our “pathway to success” process.

We often begin the education process by looking at the relationship between investment risk and potential reward. As one might expect, investment risk and reward are closely related. That is, as you take on more investment risk you should expect a higher potential return.

In order to properly structure your equity portfolio, we consider three main factors:

  • Diversification: In order to minimize risk over time, your equity portfolio should be well diversified. As a guideline, consider including investments from at least five to six market sectors over a minimum of three years.
  • Expenses: Transaction and management expenses, as well as capital gain taxes, can inhibit portfolio returns and should be minimized.
  • Regular Reviews Your asset allocation should be reviewed and rebalanced periodically to ensure that your portfolio holdings still match your investment goals, your time horizon, and your tolerance for risk.

To meet the above criteria we use four basic tools:

  • Mutual Funds*: Mutual funds offer a low cost way for investors to diversify their stock investments while also enjoying professional management. We identify and invest our clients assets in what we believe are the best mutual funds available, and combine these funds to create a portfolio corresponding to each client’s individual risk profile. We aggressively screen the universe of mutual funds for a number of important characteristics such as short and long term return relative to their benchmark, consistency to stay within their stated investment policy, tax efficiency, cost, and continuity of management.
  • Exchange Traded Funds*: Similar to index funds, exchange traded funds (ETFs) are passively managed portfolios that track particular segments of the stock market. ETFs offer an alternative way for investors to address the need for diversification with low expenses, minimal trading costs, and tax efficiency.
  • Individual Stock: We advocate some individual stocks as a compliment to a well-designed core portfolio.
  • Alternative investments: We advocate some alternative investments when appropriate.