How We Manage Money
Individually-Managed and Custom-Built
- 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.
Equity Investment Philosophy
Fixed Income Investment Philosophy
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.
- 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.
How We Do the Work
We pride ourselves on the fact that we do the research ourselves, independently.
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.