1. Simplicity Matters

    Investors are often attracted to complexity. A complex financial plan may look impressive, even if it isn’t understandable. Complex solutions sound smart, even when they aren’t. The problem with implementing a plan you don’t understand is that sticking to that plan through thick and thin can be so much more difficult. Complexity can lead to confusion; it may also lead to poor decision-making over time.

    This doesn’t mean that the simplest solution is always the best solution, but simpler is often better.

    How our clients benefit

    Simplicity generally leads to confidence and trust. When you understand your plan and your investments, it is easier to remain calm in times of turmoil. There will be good times and bad times for any investor. Keeping the plan simple can help keep our clients on the path to success.

  2. Risk Matters

    Just as goals are unique to each client, so is their level of risk. We begin by identifying our client’s individual risk tolerance, amount required, and capacity. By definition, the purpose of financial planning is to achieve one’s goals with minimal risk.

    We focus on risk first, before considering each individual investment. What does a bad outcome look like? And what is the worst case scenario?

    How our clients benefit

    For clients needing income from their investments, risk becomes even more important in that withdrawing income when investments are down in value can have a long-term negative effect on the portfolio and its ability to produce sustainable future income. Since we understand that risk is complicated, we discuss it with our clients, create a risk budget for each account and then monitor and manage it continuously thereafter.

  3. Income Matters

    Some investors are incredibly focused on income. They think of investments in terms of income and principal. However, you don’t spend income or principal, you spend money. And the money doesn’t know where it came from. The money doesn’t know if it’s income or principal. So income matters, but it’s not the only thing.

    Income matters… but not the way you think.

    How our clients benefit

    Income adds stability, simplicity and longevity to our clients’ portfolios. We have had a focus on income-producing investments for more than 35 years. Our clients appreciate the durability and growth these income streams can potentially provide. We prefer income streams that can match or exceed the rate of inflation.

  4. Diversification Matters

    Proper investment diversification means that you own a variety of asset classes and a variety of individual positions within each asset class. And that means that in any market environment, you can expect to have some investments that are working well, and some that are not.

    Diversification means always having to say you’re sorry.

    How our clients benefit

    For each investment, we consider its expected return, its individual risk, and its contribution to diversifying your portfolio. We have a strong preference for well-diversified portfolios. Over time the goal for our clients’ portfolios is to have lower volatility, better risk-adjusted returns and an increased probability of achieving their financial goals.

  5. Price Matters

    We begin with an estimate for the value of individual investments, sectors, and asset classes, based on historical relationships, estimated growth, and the relative prices of various assets. This allows us to form an opinion of the value of the investment and determine if its price is justified by its value. We seek to buy assets selling below their value and sell assets if prices rise above their value.

    Price and value are not always equal. Price can change quickly in turbulent financial markets. Value, the true worth of an investment, changes much more slowly.

    How our clients benefit

    Paying attention to the price we pay for investments saves our clients’ money and reduces the risk of overpaying. Ultimately, that may lead to reduced risk and better results.