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My firm was founded from scratch in 2012, so for the most part we’ve caught just the second half of the market growth. Of course, everyone is happy when the markets are putting up solid gains year after year. I always disclaim responsibility for these gains – markets provide returns, not investment managers. My focus is on keeping clients focused on the long term and controlling the factors of their financial lives that are actually under our control – tax planning, controlling costs and financial decisions outside of their portfolios.
Can you identify for us the main components of importance for your clients? Ex. Planning for retirement, income investors, taking on more risk, etc.
Most of my clients are in a position where they are approaching or are trying to maintain their financial independence. A typical plan will focus on generating sustainable withdrawals from their investment portfolio for the rest of their lives, controlling their income taxes and building an efficient investment portfolio that works hard for them, not Wall Street.
What asset allocation do you prefer right now? (stocks, bonds, cash)
I think that “right now” is a dangerous way to look at portfolio construction, as it implies that I know what is coming next in the markets. Asset allocation is an individual decision that takes into account an investor’s goals, ability to take risk, need to take risk and desire to take risk. I manage client portfolios that are fairly conservative (30% stocks) to much more aggressive (85% stocks).
What is a normal day like for someone like yourself that manages your own firm?
I spend my days working with clients. I am on the phone, in meetings and responding to emails for roughly half the day, and I spend the other half doing planning for those clients and managing portfolios – rebalancing, tax loss harvesting, etc. I do little to no “marketing” as the firm is growing at a very healthy rate from organic referrals and my online presence.
Despite the big run we’ve seen, where do you think the main opportunities are in the markets going forward?
I don’t know. I could tell you what I think based on valuation, interest rates, the economy, etc, and I would have just as good of a chance of being wrong as being right. Markets are fickle and unpredictable because they are made up of people, who have a tendency to be maddeningly irrational. My clients own balanced, globally diversified portfolios of stocks and bonds and we will rebalance as opportunities are presented, but not make near-term forecasts about what might happen in the markets.
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of MutualFunds.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.
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