Investment Strategies & Philosophy
Our formula for financial success: low fees + professional money management = increased wealth
Our investment strategies and philosophy are built on the belief that information relative to a security is quickly reflected in the price of that security. We believe the markets are quite efficient, making it very difficult for active stock pickers to beat their benchmarks over the long term. Therefore, our low-cost investment strategies include baskets of securities called Exchange Traded Funds (ETFs), with some utilization of Index Funds.
Studies have shown that how money is distributed across asset classes is the most important decision in determining long-term returns. Considerable time is dedicated to the process of establishing an appropriate asset allocation for each client. The portion of a portfolio allocated to each of the major asset classes; stocks, bonds, real estate, and cash, is based on an understanding of our client’s risk tolerance, the current portfolio value, the length of time before withdrawals will start, the number of years withdrawals will continue, and the expected dollar amount to be withdrawn annually.
The securities purchased to implement the asset allocations strategy, are selected through in-depth research and analysis.
Why do we use ETFs instead of Index Funds?
Both types of securites are low cost, tax efficient vehicles for investing. We select ETFs predominately for their ability to trade like a stock, giving us more knowledge and control of the price of each security we buy and sell. Index funds trade at the end-of-day price. Therefore, fund prices on transactions made throughout the day are not known until the markets close. While we do not make frequent trades in the portfolios, when we decide the time is right to buy or sell, knowing the price we pay or receive is important to us.
What type of fees will you pay?
There are three types of fees incurred; the internal fees of the ETF or Index Fund and transaction costs are fees charged by third party service providers. We do not receive any portion. The third fee is our fee for managing your portfolio(s). That is the only fee we receive. We manage money with a conscious effort to keep your fees as low as possible without sacrificing returns.