Investment Philosophy & Implementation Process

Time Horizon -We consider time horizon ‘The Patience Factor’ (How patient can you be in a market of turmoil?). Our clients have multi-stage time horizons, reflecting both short-term & long-term liabilities. We take these into account when investing in order to properly fund all future liquidity events

Risk -Risk is often measured in relative terms. An account can have less risk if it goes down less than the market. In this case, beating the market is a hollow victory ’ the portfolio is still negative. No one can spend negative returns. We choose to define risk in absolute terms. If your top concern is retirement income, calculating risk is not much more than determining how much income reduction can you tolerate in a declining market. While risk in inherent in everyday life and there is a certain amount of risk in all investments, we educate clients so they understand the risk-return trade-offs we make on their behalf.

Volatility -Volatility can be explained as ‘the quality of the ride.’ Different investment disciplines have different ranges in volatility. Blended appropriately, different investment classes with different levels of volatility can actually improve risk adjusted returns. We utilize multiple investment classes with a range of correlation and non-correlation to help reduce volatility.

Style ’ Investment style is measured by a manager’s discipline and his ability to maintain it during all economic cycles. Our ability to maintain confidence & commitment during the inevitable time a style is out of favor is highlighted by our philosophy to consistently re-allocate (over-weighting and under-weighting, but never eliminating) asset classes. We require our portfolio managers to have the discipline to avoid ‘style drift.’

Investment Vehicles -Our independence allows us to use many different managers and products in creating customized investment solutions. We utilize a transparent model which favors holding individual equities & bonds while incorporating mutual funds & separately managed (out-sourced) accounts to help diversify holdings.

Cost -We believe costs should justify the value we add to a relationship. Our system incorporates a combination of fee-based and non fee-based portfolios to help effectively manage costs. Actively managed disciplines are charged a flat fee regardless of the quantity of transactions. Passively managed (buy & hold) accounts typically incorporate a per-transaction charge.

Passive vs. Active ’ Our investment philosophy favors an active approach. We blend a client’s risk tolerance, income needs, and long-term goals with a commitment to continually monitor markets and explore opportunities in all economic conditions.

Inflation ’ Beware. Underestimating the effects of inflation can potentially destroy an otherwise sound investment plan. When constructing client portfolios, we strive to strike a balance between future growth and current income needs.

Taxes -The ideal after-tax strategy begins with the most significant and consistent pre-tax results. Every return will be taxed some way, some how. Our commitment to help minimize taxes explores each client’s tax exposure to ordinary income, schedule A & C, capital gains, passive & active business income, and interest income to create an optimum tax plan.