No one can accurately predict what will happen with the economy, so I focus on factors that can be controlled.
Factors that Can be Controlled
- With a diversified portfolio we eliminate much of the risk that is specific to any one company or industry.
- We select low cost index funds to minimize expenses.
- We carefully evaluate where assets should be placed in your portfolio in order to lower taxes (described further in my investment process shown below).
My Investment Process
- I create an investment strategy for your portfolio as a whole.
- For employer retirement accounts (ex., 401(k), 403(b) or 401(a) plan) I cherry pick the best funds from the options available to you. Employer retirement accounts often have excellent funds in some asset categories and sub-standard funds in other asset categories.
- Select the funds that will be best for you to hold in your individual retirement accounts (e.g., Traditional IRA and Rollover IRA).
- Select the funds that will be best for you to hold in your tax-free retirement accounts (e.g., Roth IRA).
- Select the funds that will be best for you to hold in your non-retirement accounts (e.g., individual brokerage, joint accounts, and trust accounts).
- Each account when looked at individually will likely have a different mix of assets than your other accounts, but when added together I make sure that your overall portfolio closely matches the strategy that we set for your portfolio as a whole.
- Eventually, when your portfolio needs to rebalanced, I do so in a tax sensitive way. I'm conscious of how each of your accounts is taxed and I carefully select which of your accounts to update so that taxes take a smaller bite out of your investment returns.
How my Investment Process is Different
Many investment managers, especially asset management services at big brokerage firms, don't use the process outlined above. Yes, it is common to use index funds, although way too many firms are still pretending they can time the market and are using expensive actively managed funds.
I set an investment strategy for your portfolio as a whole and then carefully select how we should use each of your accounts to help achieve that objective. In contrast, many other firms set their strategies at the account level and ignore the fact that there are huge differences between how the IRS taxes each type of account. My approach lowers investment taxes and increases the long-term growth of your portfolio.
The reason that my process isn't more widely used is that it is not as efficient for the investment manager. My methods take time and no one has figured out how to do what I do at the scale that big companies need to work at. I don't mass-produce investment strategies, I craft them.