 Diversification.
As the saying goes, you shouldn’t put your eggs in too few baskets. One might drop. Being diversified in the stock market is easier than ever through low cost Exchange Traded Funds (ETFs), which usually contain hundreds of stocks in many industries. Proper diversification minimizes the risk of being concentrated in the wrong stocks or industry, which might drag down your whole portfolio.
Asset allocation - how much to have in stocks, bonds/CDs, and cash.
Having the right mix for your goals, age, and circumstances is one of the keys to a successful plan. A higher percentage in stocks means more up and down volatility - but more potential growth over time. A higher weighting in bonds means more stability, but lower average returns over time. We’ll recommend an appropriate mix for you.
Tax efficiency.
The taxes you pay on your investment portfolio take away from the portion of your profits and income that you keep. We'll recommend a strategy that intends to achieve long term capital gains (taxed at lower rates) and, where appropriate, tax exempt income from municipal bonds. We will help you make tax efficient investment decisions with your retirement accounts, in consultation with your tax advisor.
Low investment costs.
We recommend that most investments in the stock market be in low cost ETFs. The internal expense ratios of broad-based ETFs invested in U.S. stocks average about 0.25%, and a little higher for international ETFs. By comparison, the average internal costs of mutual funds are closer to 1.6%, according to the Bogle Research Center. For smaller accounts, where we recommend no-load mutual funds instead of ETFs, we search for those with expense ratios well below the average for mutual funds.
Transparency - nothing should be hidden from you.
The sunlight should shine on your investment portfolio. Simply put, you should know all of the costs that you are paying; you should know what you have invested in, and be able to see inside of it; and you should know everything about your relationship with us. Also, you shouldn’t be locked in to anything.
Independent advice.
You deserve investment advice that is focused on helping you pursue your goals - not the goals of large financial companies that want to sell you their high cost packaged products. Our only compensation comes from the advisory fee you pay. Our incentive is to give you good advice, so that you will continue to invest with us, and so that you will introduce us to your friends.
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