Our Investment Approach
Our Investment Approach is broken down into five core sectors: Simplicity, Risk, Income, Diversification and Price.
Below you will find a brief summary of each and you can click "Read More" to learn more about why each sector is important, the approach we take within each sector and how our clients benefit from this approach.
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.
In everyday conversation, the word “risk” can mean danger, uncertainty, opportunity or thrill.
When investors think about risk, often their immediate concern is, “How much did (or could) I lose?” Actually the more important question is, “Did (or will) I reach my goals?”
Just as their goals are unique to each client, so is their level of risk – their overall comfort level with risk, how much risk they need to take and how much risk they can afford to take.
We could title this, “Income Matters…But Not the Way You Think.” 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.
Diversification is a term that we hear in investment circles as well as many areas of life. Some people think of it as not having all of their eggs in one basket. Others diversify everything, from buying groceries at every store in town to providing an overwhelming number of lessons and sports activities for their children.
Our favorite definition of diversification is: “Diversification means always having to say you’re sorry.”
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.
Every investment comes at a price – not only in terms of the dollars spent to purchase the investment, but also the ongoing cost to own it. Investors are often attracted to an asset class, strategy or specific investment by a story. But the price paid for the investment is more likely to determine its success than the story behind it.
If you have questions about our Investment Approach or if you would like to set up an appointment with a financial advisor to discuss your financial situation, please send us a message using the Contact Us form or give us a call at (704) 553-8006.