Investments

Many of our clients still need to accumulate a substantial amount of wealth in order to live the life they want to live upon retirement. We rely, to a large degree, on future stock market returns to generate growth on investment assets. The problem any investor encounters are the inevitable market downturns that occur as the economy ebbs and flows. Everyone is happy as long as markets are going up. But nobody is happy when markets turn sour and investment values drop significantly.

A Better Way To Invest

We hear frequently from new clients that their previous advisors never did anything to help them avoid bad years such as 2000-2002 when the dot-com bubble burst. Or even worse – 2008 when it seemed like the market was going to relive the great depression years.

The fact is that traditional advisors at large brokerage firms are simply not equipped, and may not even be allowed, to help their clients protect their portfolios from losing 30%, 40%, or 50% when the markets go through a recessionary phase. They are not trained to provide the kind of advice that will keep their clients’ portfolios relatively stable in a market downturn.

In contrast, our investment philosophy is centered on the idea that we always need to invest in a way that is best for our clients. And we firmly believe it is our duty to help our clients avoid losing substantial sums of money when markets decline.

Hedging Techniques To Manage Downside

We believe that providing hedging techniques is not only critical, but also a necessary function of any investment advisor. Nobody can time the markets perfectly to always know when to buy into the markets, when to sell out, and when to get back in. There simply is no perfect system.

The best solution available is to combine investments in growth-oriented assets with three simple hedging mechanisms:

  • Trailing stop-loss orders that sell out losing positions and holds on to the winners as long as they continue to go up. When the winners start to lose, a sell order is triggered and the gain is protected.
  • Slightly out-of-the-money Put Options for broad market index funds during abnormally high peaks and during historically volatile seasons.
  • Exposure to alternative assets such as Volatility Futures that correlate inversely with market downside.

Is your current advisor doing this for you? We will do this for you for no extra fee. It’s simply built in to our system.

Low Expense Funds

We favor investing the core of your portfolio in broad index funds that capture the general upside of a given set of stocks. We use exchange-traded funds (ETF) to minimize costs that ultimately come out of your investment portfolio. Our system will combine broad index exposure with ETFs that specifically target areas within the broad market, including foreign funds, which are growing faster than the overall market. All the while we implement hedging techniques on all equity exposure.

Our objective is to deliver to our clients a higher than average growth rate with lower than average volatility. Do not assume that we are always successful with every investment strategy. There simply is no way to be perfect in this arena. But we aim to provide a better experience than the old style of investing of riding the roller coaster otherwise known as the stock market.

Fee-Based Service

We charge a fee based upon the level of assets you provide to our firm to be managed. Our fee structure is straightforward, easy to understand, and is competitive with other advisory firms. We believe the value to you is the reduction of downside volatility that we provide to you at no additional cost. Our goal is to deliver better service at the same or lower cost you are currently getting elsewhere.

Limited Number of Clients

Our fee also includes all the regular meetings and consultations during the year that you would expect to have from your advisor. The difference is – we will actually contact you regularly throughout the year to sit down with you, understand changes that may be happening in your life, advise you, and provide all the ongoing support you need to reach your most critical financial goals. We do not want to be the type of advisor you pay for but never see or hear from.

We accomplish this objective by limiting the number of clients our advisors will serve. Our ideal client-to-advisor ratio is no more than 100 clients to one advisor. We want our advisors to spend the bulk of their time serving clients rather than focusing on selling to new ones.