While investment management is only one part of what we do for our clients, investments are generally a key driver in whether investors are able to achieve their financial goals. Investments can help our clients fund goals like providing a college education for their children or grandchildren. Investing is the key to accumulating a nest egg for their retirement, and for helping them keep ahead of inflation once they are retired.

Our approach to investment management is centered upon your financial goals. We start with those goals and include your time horizon for achieving them along with your risk tolerance. Risk management is an essential part of our investing process. Some aspects of our process include:

Asset Allocation

Asset allocation refers to how your investment portfolio is divided between the three main assets classes, stocks, bonds and cash. Beyond this, we look at the allocation at a more granular level to include sub-asset classes such as domestic large cap, small cap and mid-cap stocks. We also look at the allocation to growth and value-oriented stocks, as well as the inclusion of non-U.S. stocks. We do the same level of analysis when it comes to fixed income and to cash-like assets.

Overall, we develop an asset allocation strategy that is designed to help fuel your overall financial goals and objectives. We monitor your allocation and rebalance your portfolio back to our target allocations periodically to maintain the balance between managing downside risk and upside potential inherent in your investment strategy.

Determining your asset allocation is not just a one-time event. We review your allocation as part of our regular reviews of your overall situation. This doesn’t mean that we suggest a change every time the markets make a significant move up or down, or every time we experience a blip in the economy. Rather, we suggest adjustments based on our assessment of the best asset allocation for your situation over time.

Risk management

As your life moves forward, things change. For example, in retirement you likely still need a growth component in your portfolio, but you want to limit your downside risk as well. We factor these types of issues into our review, as well as changes like commencing Social Security and possibly a pension.

Risk management is at the heart of our investing philosophy. We want to help our clients realize returns that will help them to achieve their financial goals. A big part of this is ensuring they minimize their downside risk to allow them to avoid outsized losses when the markets inevitably correct themselves. Over time maximizing our client’s risk-adjusted returns is what is important.

Asset Location

Tax planning and tax awareness are fundamental to all aspects of our services. This includes investment management. A key component of our process is asset location. This means holding certain types of investments in certain accounts based on tax-efficiency.

Our clients typically have taxable accounts and tax-advantaged accounts, such as traditional IRAs or 401(k)s as well as Roth accounts.

Holdings such as index mutual funds and ETFs, as well as individual stocks are often good candidates for a taxable account. This assumes that they will be held for at least a year to take advantage of preferrable long-term capital gains rates. Index funds are generally more tax-efficient than actively managed funds. Municipal bonds, and funds that invest in them, are also a good holding for taxable accounts.

Tax-advantaged accounts can be a good place to hold bonds and bond funds. Actively managed equity funds, which tend to throw off larger distributions are also a good candidate for these types of accounts.

To the extent possible, asset location is a key consideration in our investment management strategy for our clients.

Cost

Keeping our client’s cost of investing low is important in helping them achieve their investment goals.  Studies have shown that higher investment costs can serve to erode a significant portion of an investor’s gains over a period of years.

Where possible we use low cost index mutual funds and ETFs to keep costs low. We are cost conscious in all areas of investing and do our best to help clients incorporate low costs into the investing strategies we recommend to them.