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Portfolio Management

Our Core Beliefs

We believe our clients are risk-adverse and that preserving their capital while growing it moderately over the long-term is a primary objective in the management of their portfolios. Thus, portfolios are managed to try to meet the dual objectives of capital appreciation and capital preservation.

We don't know when markets will turn so strategic exposure across asset classes in order to balance risk and return throughout multiple market cycles is critical. We believe that a significant percentage of a portfolio's variance in returns is the result of asset allocation decisions.

We believe strategic asset allocation strategies that achieve annualized internal rates of return over full market cycles (peak to peak) of approximately 1-2%, 2-3% and 3-4% above inflation for conservative portfolios, moderate portfolios, and growth portfolios, respectively, are realistic expectations to give our clients without them enduring more risk than they have the ability, willingness, or need to take. 

(A full market cycle can be defined as a peak-to-peak period that contains a price decline of at least 20% over at least a two-month period from the previous market peak, followed by a rebound that establishes a new, higher peak.)

Every Portfolio Needs An Investment Management Plan

Every Portfolio Needs An Investment Management Plan

Your investment management plan, or investment policy statement, establishes guidelines, decisions made by you and us, to manage your portfolio. This business plan for your portfolio:

  1. Identifies your financial goal and the time frame associated with that goal.
  2. Establishes your investment experience and your tolerance for portfolio value fluctuations over 1, 3 and 5 year time frames taking a bear market experience into account.
  3. States your investment objective and expected return over your portfolio's expected time horizon.
  4. Specifies our investment philosophy and defines the strategic asset allocation strategy that we use to manage your portfolio.
  5. Establishes our management procedures, such as how often your portfolio will be rebalanced.
  6. Describes how we will communicate with you about your portfolio, such as how often you will receive performance reports and account statements.

Portfolio Construction and Management

We construct and consistently monitor our strategic asset allocation models and your portfolio using a rigorous and independent research process.

  1. We determine which broad asset classes to use and what percentage to allocate to each asset class to construct your portfolio: equities, bonds, cash, and alternatives.
  2. We determine which investment vehicles (stocks, exchange-traded funds, mutual funds) and which specific securities to use to include in your portfolio. Our research is independent, unbiased, and objective. For our equity sleeve we select individual stocks - companies with wide or narrow moats. We pay close attention to controlling expenses as we compare risk/return characteristics of individual securities.
  3. We rebalance your portfolio according to our target allocation ranges and also leave ourselves the flexibility to overweight or underweight asset classes to respond to potential draw-downs due to the economic or political climate.
Insights To Embrace For Successful Long-Term Investing

Insights To Embrace For Successful Long-Term Investing

Maintain reasonable return expectations and recognize that long-term performance is measured in years. 

Promise yourself to adhere to your investment policy statement, especially during difficult market times.

Realize that portfolio performance is best measured by whether it is moving you towards your specific goals on schedule. Independent of your financial plan, investment accounts don't bear much meaning.

Control what you can. Save more, spend less, retire later. Critical financial plan decisions can have a much more significant impact on your life than the investment return on a single account.