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Investment Considerations
Here is the unvarnished truth about the history on modern investing :
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Most actively managed money managers and mutual funds fail to match let alone beat passively held indexes over longer periods of time.
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The managers who beat the indexes seldom do it in successive periods and can not be identified in advance.
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Actively managed portfolios are often subject to significant style drift whereby the fund managers are making tactical asset allocation decisions for you. They do this without informing you in advance, and those changes aren't necessarily in line with your personal portfolio policy.
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The expenses associated with actively managed portfolios can eat up a large part of your long term gains. These expenses are often much higher, sometimes three times as much, as expenses on passive investments.
Structure-The interrelation of the parts
We believe that a passive “Asset Class” investment strategy, where portfolios are structured to capture the risk/return characteristics of various asset classes, are the absolute best way to invest. Portfolios should be structured to reflect the unique risk/return objectives of each client. In order to determine whether these objectives are both rational and appropriate we review with each client the following:
- The relationships of asset class returns and their associated risks including the risks of small, value, and international investing
- How diversification is rewarding both within and across asset classes.Why we avoid concentrated positions.
- The clients unique considerations- time horizon, risk tolerance, tax status, investment experience.
We make every effort to reduce the costs associated with our managed portfolios by utilizing low cost institutional quality mutual funds, and exchange traded funds (ETF's), to pursue our asset class strategies. We believe that low turnover and efficient rebalancing will maximize portfolio results.
Structuring the correct mix of investments to conform with different clients portfolio objectives are predicated upon the following. We believe that research has shown the five primary factors driving portfolio returns are:
- The percentage invested in stocks versus fixed income securities (bonds)
- The percentage invested in large versus small company stocks
- The percentage invested in growth versus value
- The percentage of foriegn versus domestic investing
- The duration of you fixed income portfolio
Disclosure Contact Us
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