- Describe the process you will use to invest my money.
We provide an individualized service. An important part of setting up a new account is to meet with you to determine your investment objectives, investment constraints, and risk tolerance levels. If you have any biases for or against certain kinds of investments, we want to know. We make recommendations only after fully understanding your particular situation and arriving at a mutually agreed upon plan of action.
- Tell me more about your investment strategy.
Our overall approach is a dynamic process involving three basic levels. First, we assess the economy and markets to determine our overall percentage allocation into stocks, bonds, and cash asset classes. Next, within these three basic classes, we look for pricing inefficiencies and/or early trends to determine what kinds of securities should be held. Sometimes, we might favor larger companies with undervalued assets. At other times, we might focus more on smaller rapidly growing companies, or favor a blend of strategies. Once our strategy is in place, we then identify the fund managers who have excelled in these various "niches" or we select the individual securities ourselves based on fundamental criteria. Generally, we purchase for the longer term (over one year). We are not "market timers," but occasionally, we will engage in shorter term trading activities.
- How do you control risk in my portfolio?
We diversify our clients' accounts at three levels: First, we position monies across various asset classes (e.g. stocks, bonds, cash, etc.). Second, within each of these classes, we purchase multiple securities. Third, when we use mutual funds, we take a multi-manager approach because no fund manager provides top performance year-in and year-out.
- How do you select mutual funds?
We start with a database of over 3,000 funds, from which we select the few hundred that are viewed as the most likely to have strong future performance. This group is evaluated quantitatively and qualitatively. Quantitatively, we closely review 12 month and 3, 5, and 10 year performance track records. Importantly, we want to know how volatile a fund's return year-to-date has been relative to its track record. Other technical data such as current cash position, average P.E. ratios and forecasted earning rates of the stocks held by the fund, and overall fund expenses, help us determine whether a fund will be used in our portfolios. The qualitative information we review is equally important. We generally invest in people, not mutual funds, so if a fund manager leaves a successful fund, our money will usually follow the manager. We want to know how a fund manager selects stocks, because we break down our stock mutual funds into distinct "investment styles." Frequently, we visit directly with the fund managers and their staff. All of these factors and many more influence our selection of which funds we will use in our managed accounts.
- How often will my account be reviewed?
Accounts are continuously monitored. Each calendar quarter, you will receive a report summarizing a year-to-date performance, current percentage allocation among stocks, bonds, cash, etc., transactions of
the prior quarter, and our economic outlook and planned investment strategy for the forthcoming quarter. When at all possible, we will try to remain available for your phone inquiries or personal visits.
- Where are my investments held?
Your investments are kept by an independent third party custodian who is responsible for the safe receipt, maintenance, and delivery of your securities. This includes the accurate reporting of investment values and transactions.
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