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"A Goal Without a Plan Is Just a Wish"
-Antoine de Saint-Exupery

   

Our Philosophy

These are Structured Asset Management, Inc.'s core beliefs and are the basis for formulating your plan:

Markets Work

The difference in returns among portfolios is largely determined by relative exposure to the market, small cap stocks, and value stocks. Stocks offer higher expected returns than fixed income due to the higher perceived risk of being in the market. Many economists further believe that small cap and value stocks outperform large cap and growth because the market rationally discounts their prices to reflect underlying risk. The lower prices give investors greater upside as compensation for bearing this risk.

Investors who want to earn above-market returns must take higher risks in their portfolio. The cross-hair map illustrates that tilting a portfolio toward small cap and value stocks increases the exposure to risk and expected return. Decreasing this exposure relative to the market results in lower risk and lower expected return.

Fees Matter

Active managers seek to beat the market through stock selection and market timing. They generally charge higher fees than passive managers as compensation for their perceived “skill.” These fees can inflict a significant penalty on net investment returns and terminal wealth, as the above graph demonstrates for various cost levels.

 

Discipline Is Important 

This slide shows the performance of a balanced investment strategy following a few historical crises. Each crisis is labeled with the month and year that it occurred or peaked. The subsequent one-, three-, and five-year annualized returns start from the first day of the month following each crisis. Although a global investment strategy would have suffered losses immediately following most events, the financial markets recovered over time, as indicated by the positive three- and five-year cumulative returns. Negative events such as these may tempt investors to flee the financial markets. But diversification and a long-term perspective can help investors apply discipline to ride out the storm.

A defined investment policy helps maintain the discipline needed to achieve your goals in light of market gyrations and the continuous assault on your senses by the financial news media. Discipline will help keep you strategically focused on rebalancing and risk tolerance issues while allowing you to tactically implement your plan in a cost effective manner.

 

Latest Blog Posts

Sep 29, 2017 by Structured Asset Management, Inc.

Toys "R" Us filed for bankruptcy last week. This was amazing to me. I remember going there 15 years ago and finding the parking lot jam-packed, the lines at the checkout lanes long with people trying to go through with two or more shopping carts full of goodies. It was the place to go to buy supplies for toddlers and gifts for special occasions. In fact, Toys "R" Us and their companion store, Babies "R" Us, were once considered category killers. No one...

Sep 26, 2017 by Structured Asset Management, Inc.

I've seen a lot of headlines recently about investors worrying about what will happen when the Federal Reserve starts selling off this massive portfolio of bonds and mortgages they've bought over the last nine years. J.P. Morgan says it could be "disruptive", Investment News says we are "bracing" for these bond sales. My view is that the people at the Federal Reserve are a lot smarter than that.

Many people have the misconception that when...

Sep 15, 2017 by Structured Asset Management, Inc.

Equifax recently announced a massive data security breach, exposing personal identification information on as many as 143 million Americans. They have set up a website (equifaxsecurity2017.com) where you can check to see if you've been affected and enroll in one free year of credit monitoring and identity theft protection.

What other steps can I take?

It is always a good idea to monitor your own personal information and be...

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