Capturing Market Returns
Market forces are so competitive that in most asset classes, the markets do a better job of valuing companies than do professional money managers. Thus, our clients invest alongside sophisticated institutional investors in "asset-class" or "passive" funds designed to capture market returns. By contrast, we generally avoid professional money managers who attempt to outguess the markets through timing or security-selection strategies.
We typically diversify a portfolio across a variety of domestic and international markets:
- Municipal bonds
- U.S. government bonds
- Foreign bonds
- Foreign large companies
- Foreign small companies
- Emerging market companies
- U.S. large companies
- U.S. small companies
- U.S. micro companies
- Real estate
- Merger arbitrage
In diversifying your portfolio, we frequently accommodate individual needs and preferences, including:
- A desire to incorporate "sustainable" or socially responsible investments
- Diversification around concentrated positions that you need or desire to hold
- Custom cash-management plans to withdraw money for current spending needs
Defined Investment Policy
Developing an Investment Policy Statement is the first step in managing your portfolio. The IPS is a written document that provides guidance for managing your investments based on your decisions and directives. By specifying the purpose of your portfolio, permissible and impermissible investments, and expectations for performance, we establish a well-conceived, long-term investment discipline, rather than one based on ad hoc reactions to short-term market fluctuations.
Many of our clients have much of their wealth in brokerage accounts subject to taxes. To help minimize your tax burden, we use a variety of strategies such as harvesting tax losses to offset future gains and retaining investment managers who will work to minimize taxable transactions.
Lower Investment Costs
Many institutional investors have a far more successful investment experience than most individuals for one simple reason: their investment costs are lower. We are fortunate to have access to some of the same low-cost investment managers that institutions use. In addition, the funds and managers we use have much lower-than-average transaction costs.
We use sophisticated portfolio-accounting software to track performance, monitor transactions, and take advantage of opportunities to add incremental returns through rebalancing and other management techniques. We also provide you periodic reports, in addition to your monthly brokerage statements, to ensure you understand your investment strategy and its performance.