Since summer is beginning, I’ll keep “Fun Facts” short and let you get started on your summer reading list, which I’m sure will be more enjoyable but not as “Fun …” Don’t leave home without the four core principles of our investment philosophy:
- Total Portfolio Approach. We manage your total portfolio considering all accounts, whether they be single, joint or trust taxable accounts or retirement accounts like IRAs, Roth IRAs or 401(k)s. We consider “asset allocation” for the total portfolio as well as different types of accounts (for example, a Roth IRA may be more aggressively invested for growth and future inheritance). We also consider “asset location” wherein tax-inefficient investments like REITs may be limited to retirement accounts.
- Broadly Diversified Portfolio. Investment management is a contrarian process where “buy low and sell high” is easier said than done. Diversification helps smooth the peaks and valleys, although it is challenging not to load up on the most recent best investment and avoid the most recent dog. Discipline helps achieve long-term goals and avoid strikeouts. (A great summer analogy, wouldn’t you say?)
- Risk and Return Are Related (The 3 R’s). Nothing demonstrates this principle better than the seemingly perpetual period of low interest rates that we have been experiencing. Low risk yields low return, and higher returns require accepting more risk and potential volatility.
- Minimize Fund Fees, Expenses and Income Taxes. Simply said, net returns are what count! Low fund fees are a good predictor of future relative performance.
Enjoy these early summer days!
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As always, please contact us with any questions, news or comments.