INVESTMENT APPROACH

You have found a source of affordable investment advice.  I work primarily with do-it-yourself investors; I offer investment advice on an hourly basis; I invest utilizing a low-cost indexed approach.  I enjoy working with fledgling investors, guiding them to avoid the mistakes too often made by the beginner.

Sometimes prospective do-it-yourselfers believe that managing investments requires a lot of time. This isn’t the case for the low-cost indexed approach.

The approach I recommend enables do-it-yourself investors to capture close-to-market returns and to minimize fees and transactions costs doing so.  Overwhelming evidence shows that investment advisors, on average, underperform the markets after accounting for fees. In my 25 years' experience in the investment markets managing money for institutions as well as for individuals, I have seen the movement of “smart money” away from active management to indexing. My mission is to show non-institutional investors how to participate in this movement.  This low-cost indexed approach has been advocated for many years by John Bogle, the founder of Vanguard Funds, as well as many others.

Sometimes prospective do-it-yourselfers believe that managing investments requires a lot of time. This isn’t the case for the low-cost indexed approach. Consider that most people built up their nest egg using the company 401(k), and it didn’t take a lot of time. Once the funds were chosen, most of the work had been done. Similarly, indexed investments eliminate the need for trading and, instead, focus on the most important job—asset allocation.

I believe that investors are seeking to capture market returns and avoid underperformance.

Some investors want to take on the challenge of trying to outperform the market. Maybe they believe they have an edge, or they have a subscription newsletter which outlines how to outperform the market. For this situation, assuming basic diversification and risk management principles are followed, I would be comfortable in recommending up to 20% of the portfolio to be non-indexed. This is a sufficient proportion of assets to add meaningfully to the bottom line if the active portion does outperform.

Many advisors do not sell performance but, instead, sell a relationship. If that’s what you are looking for in an advisor, you need to keep looking. I don’t send out birthday cards or put lavish art on the walls. I believe that investors are seeking to capture market returns and avoid underperformance. After all, that is what will determine whether they reach their retirement goals.

If you walk into an advisor’s office with a million dollars saying you need help, you will get attention. The advisors will tell you they are fiduciaries offering objective advice and  they are “on the same side of the table as you.”  But, rarely do they offer evidence that their investment approach is better than that of other advisors. In fact, in most cases, you’ll find that obtaining their performance record is like pulling teeth.  In addition, the least expensive advisors will charge you 1% of assets. That’s $10,000 for the first year. My approach allows you to keep most of that $10,000.  Again, using my approach, you don’t have to spend a lot of time analyzing trading options and poring over your investments.

I know from experience that some of you will not want to take the step of managing your assets yourself. If so, I can manage your funds for less than one-half of one percent. In terms of the example above, it would at least keep $6,000 in your nest egg growing.  I will explain the approach so that you understand the process completely, with the goal of you taking over management of your money at some time in the future – maybe when you retire.

Let’s be clear at the outset. If you are satisfied that your investment advisor can produce better-than-market returns, is responsive so that you understand what s/he is doing, and is worth the fees you are paying, then by all means stay with the advisor. If you have questions, if you want a second opinion, if you wonder whether you can and should do it yourself, then we should talk. Give me a call and let’s set up an appointment. The one-hour consultation will cost $150—it could be the best investment you ever make.

Enjoy puttering around my website and getting more information on my services. If you have questions, please do not hesitate to contact me.