Investment Management
Our investment portfolios are carefully designed to help retirement investors reduce risk, improve returns, and create a reliable income stream.
KEEP COSTS LOW
The best predictor of future returns is the cost of your investments. In other words, low-cost investments are expected to provide better returns than high-cost investments.
For that reason, we build our retirement portfolios using ultra-low-cost index funds and selected individual securities. This helps to improve the success rate of your retirement plan and reduce unnecessary cost.
OWN TAX-EFFICIENT INVESTMENTS
Warren Buffet says his favorite holding period is forever. We agree.
While buying an investment and holding it forever isn't practical for most retirees, we create portfolios with "low turnover."
Every time an investment is bought or sold (i.e "turned over"), costs are incurred. Not just obvious costs like transaction fees and taxes, but hidden costs like bid-ask spreads.
These costs eat away at your investment returns. To protect your investment returns and mitigate taxes, we target investments with low turnover.
OWN THE RIGHT ASSET CLASSES IN THE RIGHT PLACES
ALLOCATION
Not all investments are created equal. Just because you can invest your money into something (e.g. Gold), does not mean you should. Establishing an appropriate asset mix of stocks, bonds, cash, and real estate in your portfolio is a dynamic process. As such, the asset mix should reflect your goals at any point in time.
We only invest in asset classes that:
Have been proven through academic research to provide superior risk-adjusted returns
Work well when invested together in a diversified portfolio
LOCATION
Only after you determine the proper asset mix for your portfolio can you position those investments in the appropriate accounts to minimize taxes. To benefit from this strategy, investors must have investments in both taxable and tax-deferred accounts. Typically, investors who use a balanced investment strategy consisting of equity and fixed-income investments can get the most benefit from asset location.
Creating the same asset allocation in each account ignores the tax benefit of properly placing securities in the type of account that will assure the best after-tax return.
How a security is taxed will determine where it should be located:
Long-term capital gains and qualified dividends are given favorable rates of 0%, 15% or 20%, depending on your income level.
Meanwhile, taxable interest is reported on Form 1040 and is subject to ordinary income rates, which range between 10% and 37%
Asset location determines the proper account in which to place investments for the most favorable overall tax treatment. The best location for a particular security depends on an investor's financial profile, prevailing tax laws, investment holding periods, and the tax and return characteristics of the underlying securities.
As a fiduciary, our job is to make investment decisions that are in your best interest. This means ignoring the daily headlines and sticking with evidence-based solutions.