Most—but not all – of our clients are in these investment models. We consider individual clients’ needs when guiding their investment strategies. Everyone is at a different stage in their journey toward retirement, so needs vary.
We transition clients into these models when the time is appropriate. We reach that conclusion through routine communication and annual account reviews.
Because so many of our clients wind up in our investment models, it’s important to us to share our three core values related to our investment models, why they are important to us, and what this means for clients.
- Long-term track record: Past performance is not a predictor of future performance, but every advisor must look to something for confidence in a fund’s ability to help clients work toward their investment goals. We look for mutual funds and ETFs that are at least 20 years old when selecting them for our investment models. Consider the market changes during any 20-year period. Funds that show an ability to perform in good times and bad are worth considering in our models.We also look at fund manager experience. Mutual funds are managed by a team of investment professionals who determine the fund’s strategy, conduct market research, monitor performance, and make changes as necessary. We look for funds that are managed by professionals with about 20 years of experience.We continually monitor the funds in our models, which creates an additional layer of oversight for our clients. Because we choose funds with long-term track records and review them at least quarterly, we are slow to make changes. Our hope is that the funds we pick perform well and are investments you still hold 30 years from now. However, we are quick to make a change if there is a substantial, meaningful change within a fund, such as the sudden exit of a fund manager.
- Returns: The name of the game is getting to retirement with more money than you originally invested, and we look for mutual funds and ETFs that have returned 10-12 percent annually since their inception. That doesn’t mean the funds in our investment models grow by that much every year. Some years a fund may be down 17 percent; other years, it could be up 23 percent. But through good and bad economic times, the funds in our investment models have averaged 10-12 percent growth per year.
- Keep portfolio costs at a minimum: Our annual fee appears as a line item on clients’ quarterly statements, but other investment fees can be frustratingly difficult for clients to see. To keep it simple, mutual funds and ETFs have internal costs, and our goal is to keep those costs around .50 basis points or less. That means .5 percent of your portfolio. The goal is growing your nest egg, so we strive to keep costs to a minimum.
What does this mean for our clients?
When we review your investments, particular attention is given to these values. Our services are not free, so we demonstrate daily that you, your financial plan, and your retirement goals are better off with us in your corner than with you trying to go it alone. We keep our eyes on your goals and strive to ensure that you’re appropriately invested.
Do you know someone who might benefit from our services? We are here to help.