How We Manage Money

We manage money as a Fiduciary.  Simply put, Naples Global Advisors will strive to always act in good faith and will always make decisions we believe to be in your best interests.  This is at the core of everything we do.  It is why our clients’ portfolios are individually-managed and custom-built rather than comingled and one-size-fits-all.  It is why our investment philosophy drives our process rather than a list of investment products.

Individually-Managed and Custom-Built

Each client is unique.  Therefore, it is logical to us that each clients’ monies be managed specifically for them.  While the same investment process is applied to each client, no client portfolio looks exactly the same as another.  They are custom-built to meet that specific client’s objectives and capacity for risk.  That puts the odds of success more in your favor.

Investment Process

  • After gaining an understanding of your objectives and capacity for risk, we then seek to effectively manage the first level of the risk/return equation through proper asset allocation.

  • We strive to build logically diversified portfolios using a global opportunity set of publicly traded individual stocks and bonds that are vetted and then thoughtfully assembled using a fundamental valuation discipline based on our investment philosophy.

  • We actively administer portfolios with a view toward long-term absolute returns and principal stability, with an on-going awareness of and sensitivity to the ever-changing dynamics of global economies, capital markets, tax regimes, and clients’ personal circumstances.

Our investment process is simple, logical, and time-tested.
Many brokers and financial consultants have chosen to not adhere to the Fiduciary Standard and are, therefore, only held to a lesser “suitability” level of diligence when working with their clients.  As a result, many utilize a one-size-fits-all approach based on products.  This, in turn begs the question – on what basis do they make investment management decisions? Naples Global Advisors utilizes a custom approach based on a defined investment philosophy.  We want our clients to understand our investment process.  It is simple, logical, and time-tested.

Equity Investment Philosophy

An investment firm is defined by its investment philosophy – on what basis does the firm and its professionals make investment management decisions on behalf of its clients.  At Naples Global Advisors, our core equity investment philosophy – how we make investment decisions – rests on valuation, authenticity of earnings and cash flow, and the utilization of a global opportunity set.
Paying a low relative price for a share in a company’s earnings stream has historically been a consistently profitable public market equity strategy.   This is generally recognized as “Value” investing and favored by iconic investors Benjamin Graham and Warren Buffett.  In our experience, this places the odds of success in the favor of our clients.
In building and managing client portfolios, we direct capital to where the opportunity is most favorable, with no geographic and/or size limitations.  We are less concerned about where a company is domiciled or its absolute size but rather more focused on its valuation and ability to execute on the business plan.  This expansion of the opportunity set is to the benefit of the client as it increases return potential and diversification benefits.
We favor companies with a history of paying consistent and growing dividends as it is indicative of a company’s underlying financial strength and longer term business confidence. For the investor, dividends are an important component of total return, and they serve to reduce volatility and downside risk. Importantly, many of our clients “live” off this dividend income rather than depending on unpredictable price appreciation, which helps them better weather market swoons.
If your financial advisor cannot articulate his or her investment philosophy, chances are they do not have one.
This, in turn begs the question – on what basis do they make investment management decisions. Our investment philosophy is not a black box.  We want our clients to understand our investment process.  It is simple, logical, and time-tested.

Fixed Income Investment Philosophy

An investment firm is defined by its investment philosophy – on what basis does the firm and its professionals make investment management decisions on behalf of its clients.  At Naples Global Advisors, our core fixed income investment philosophy – how we make investment decisions – rests on (risk, cash flow, and tax) control and valuation.

Our clients’ fixed income allocations have a dual purpose: provide stability of principal and income.  Those two goals can be at odds in today’s low interest rate environment.  Some advisors and investors may be taking on too much risk to chase income (and return) and jeopardize the stability of principal.  We never lose track of that, which is why control is at the core of our fixed income philosophy.

Once we ensure we are managing risk, cash flows, and taxable income appropriately, then our process comes down to valuation – what is the best yielding bond for the amount of risk we are willing to take – to ensure we are generating satisfactory income and yield from fixed income allocations.

Since we purchase individual bonds for our clients:

  • We directly control the risk- There are two main types of risk we are managing: interest rate risk (duration) and credit/default risk. The former ensures that the prices of our bonds are palatably stable while the latter ensures that our clients are going to receive timely interest and principal payments.  Controlling the risk of the fixed income allocation ultimately translates to a segment of the portfolio that provides diversification to our clients’ equity allocations.  And that helps our clients’ peace of mind.
  • We directly control the cash flow – i.e. when coupon and principal payments are made to the clients. This is important for our clients, especially those that are using these assets for living expenses, quarterly tax payments, charitable contributions, etc.
  • We directly control the tax flexibility – Depending on a client’s tax situation and the account type (taxable vs tax-deferred or tax-exempt), we utilize tax-exempt municipal bonds or taxable bonds to maximize after-tax income and returns. After all, it is the after-tax dollars that go into a client’s pocket.

We want our clients to understand our investment process.
If your financial advisor cannot articulate his or her investment philosophy, chances are they do not have one. This, in turn, begs the question – on what basis do they make investment management decisions? Our investment philosophy is not a black box.  We want our clients to understand our investment process.  It is simple, logical, and time-tested.

How We Do the Work

Brainstorming in Meeting | Naples Global Advisors, SEC Registered Investment Advisor

We pride ourselves on the fact that we do the research ourselves, independently.

Why does that matter for the client?  Because the client is talking to the people that are making the investment decisions on their behalf.  Simply, we can explain why you own what you own.

We have a team of investment analysts and portfolio managers with a wealth of diverse market experience.  The team consists of a handful of CFA Charterholders.  The CFA designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

Not only is our team tenured and credentialed but we are willing to go the extra mile for our clients.  In fact, we are willing to go over 250,000 miles.  We have traveled that many miles to places such as India, New Zealand, and Chile on behalf of our clients to visit the companies that we own for them.  “Kicking the tires”, meeting with management, and observing operations of companies across the globe adds value to our investment process and that, in turn, adds value for our clients.

Contact Naples Global Advisors