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Asset Management

Asset management is part of the personal finance trio that makes up Wealth Management

There are an endless amount of investments, styles, and strategies to choose from. Add to that an infinite amount of ways to combine these and you’ve got yourself a brain-busting overload of options.

Luckily, I have a philosophy that boils it down to a manageable list:

Match the client with the appropriate portfolio of investments that offers the client the greatest potential to meet his or her goals, based on their risk tolerance and time horizon.

First, it helps to know what to avoid; non-traded products, in-house products, and high fee products. Basically, any product that could introduce bias or the appearance of bias is excluded from our choices.

Second, plain vanilla is our favorite flavor when it comes to investing. Common and preferred stocks, tax free bonds, exchange traded funds (ETF’s) and for some clients who meet specified investment experience, exchange traded stock options. From these investment choices, I develop sound investment strategies that are appropriate for you.

Third, no investment portfolio could be considered a means to an end. It never ends! Monitoring and patience are ongoing. Sometimes your goals change, sometimes an investment needs to be replaced, and sometimes your portfolio needs rebalancing. I’m on the lookout for all three of these.

I will check in with you regularly so I may learn about any changes in your situation which may necessitate an adjustment to your investments. I will also report to you with progress reports to show you how things are going with your investment portfolio.

Fourth, external situations like recessions, geopolitical events, interest rates, inflation expectations, and other extenuating circumstances are in a constant state of change. The prevailing financial climate we’re in is going to be a powerful force, one that has the potential to create friction and slow us down in our pursuit of your goals. We simply have to understand this and adapt to it because experience tells us that environments will not adapt to us.

Fifth, limit orders are part of my investment strategy which makes stock market volatility an asset, not something to be feared. Stocks will exhibit some level of volatility. This is due to a mixture of the sector they’re in and their interest rate sensitivity. I may initiate a partial position in a new holding and use below-the-market limit buy orders to add to it. Why? Because by taking advantage of small, downside fluctuations, it gives us the potential to lower your cost-basis and to reduce overall portfolio volatility. On the converse of that, I may use trailing stop limit sell orders to scale out of positions in the event we have a substantial unrealized gain that we wish to realize and/or protect.

Sixth, our asset management fees are straight forward. We charge a fee in one of two ways; an annual percentage fee based on the amount of your assets we manage or based on a commission per trade. Some accounts sit dormant for very long stretches of time, which makes them unsuitable to be charged an annual percentage fee. And those accounts that are charged an annual percentage fee, the dollar amount of that fee will be adjusted up or down based on the performance of your account(s). If your accounts decline in value, so does my fee. This is what it means to work for you. For more information, check out my article about “Reverse Churning” that I wrote for CNBC: Are you a "reverse churning" victim?


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