Investment Advice
We provide asset-allocation plans and specific investment recommendations and help clients to implement those recommendations. Our service is tailored to the client’s needs and includes one or more of the components described in the paragraphs below. In all cases we employ the same basic ideas in giving investment advice:
- Philosophy
Investments provide the means to achieve client goals like covering expenses or assisting family members or deserving organizations; “making money” is not a primary investment goal but allows earlier achievement of client goals. - Selection Process
We recommend no-load mutual funds that employ sensible, disciplined management approaches and have low to moderate annual expenses; strong performance records during full market cycles may indicate management skill, but we are wary of very high, short-term performance, because it often indicates high risk. - Diversification
Holding investments in a variety of asset classes greatly reduces the risk of large declines in portfolio value. - Rebalancing
A client’s portfolio should be adjusted whenever it deviates significantly from target asset-allocation percentages; these adjustments are part of our disciplined approach for buying investments at relatively low prices and selling at relatively high prices.
Portfolio Evaluation
In our evaluation of an existing portfolio, we compute asset-allocation percentages and assess whether those percentages are consistent with the client’s goals and comfort level with investment risks. We examine individual holdings and give our opinion on whether alternative investments would be superior.
Investment Plan
Starting from an asset allocation with which the client has agreed, we consider the available choices in each part of a portfolio and select specific investments. In the recommended portfolio each asset class is represented at the proper allocation percentage by mutual funds with good prospects for above-average performance within their peer groups. A list of action items facilitates implementation of our recommendations.
Continuous Investment Management
Under a retainer relationship, we can provide continuous monitoring of a client’s portfolio. We produce periodic (usually, quarterly) performance reports. We execute trades for the client, if the client chooses that level of service and has given us the authority to make trades. Continuous management allows us to respond quickly to market developments and to inflows and outflows of cash by making appropriate adjustments in a client’s portfolio.