Managing wealth exclusively for people like you who are approaching retirement or already retired provides us with a unique perspective on how to generate low-risk returns for our clients.
The reason is quite simple: When you've worked hard over your lifetime to build your wealth, the last thing you want to do is place your retirement at risk. But you also want your investments to generate the necessary growth so that you can enjoy your retirement and ensure your family’s financial security.
To help you achieve these and other goals, we employ three basic principles when managing our clients’ wealth:
#1: We invest based on your particular needs. For each client, we set up an investment plan specifically to meet your goals and risk tolerance.
Unlike most investment advisors, we do not invest every client’s portfolio the same way--each account is different. Also unlike many advisors, we do not employ rigid asset allocations based just on your age or other overly simple formulas. For example, you might not depend on your investments to pay your living expenses. Or you may need or want significant investment income.
#2: We stick with high-quality investments. We have a growth-oriented, global orientation. Yet we ignore the vast majority of investments that are available to the general public.
Instead, we consider the types of investments, be they stocks, bonds, mutual funds, exchange-traded funds or other alternatives, that are suitable for most people who are in or near retirement. We insist on financial strength, good management and proven performance. Our focus on conservative growth, dividends and selective diversification gives you the low-risk investment returns you want and need.
#3: We respond proactively to changing market conditions in order to grow or protect your retirement wealth. We aim to keep investments as long as possible. But we believe it’s essential to sell investments if their fundamentals deteriorate or even if they simply become too risky to hold because of dangerous market conditions. In our view, this approach is necessary in order to preserve retirement wealth during adverse market environments.
Back in 2000-02, for instance, we built large cash positions to safeguard our clients’ assets, while keeping low allocations to common stocks and equity funds. In sharp contrast to our client-first approach, Wall Street firms and most other investment managers advocated equity allocations of 50% or more throughout the bear market! Then, in 2003, as conditions improved again, we steadily increased our exposure to equities as our focus shifted back to prudent, long-term growth, with income as needed. But as market conditions began to deteriorate in early 2007, we took steps to protect our clients’ retirement wealth by cutting equity allocations, generating safe income and building large cash positions. Until recently, we carried a 40% overall cash position.
Now the time is returning again to invest carefully for conservative growth and “total return”—capital gains, good income and rising dividends.
We also understand the importance of recognizing key investment trends. In 2001, we began to profit from the big moves in real estate investment trusts. In 2003, we started to raise our stake in smaller-company stocks as they began to outperform the big blue chips. And starting in 2004, we dramatically boosted our stake in foreign equities, which then outperformed U.S. issues for several years. Now, in 2008, we're looking primarily for sound investments that benefit from the new megatrend: inflation.
With our focus on client needs, investment quality and market vigilance, our goal is to continue generating solid, long-term returns at low risk.