As we continue in our “Who We Are” blog series, we turn to the core of our business: investing and managing money for our clients. Recently, our Investment Review Committee (IRC) has worked to clarify our investing philosophy. We have been wrestling with the academic research available to us, the strategies we have employed in the past, and how those two things affect the advice we give our clients. We did not make any radical departures from the past, but simply restated our long held beliefs regarding portfolio management.

Our discussions did lead to some changes. We have taken tactical equity management out of our portfolios. For equity exposure, we are eliminating all third party money managers and will employ an equity sleeve managed by Master’s Advisors. This sleeve is a well-diversified mutual fund asset allocation portfolio with no tactical component that uses a mix of passively and actively managed mutual funds. In addition to aligning further with our investing philosophy, this change will also lead to a lower client fee in Unified Managed Accounts (UMAs). We made these changes because the use of tactical equity management did not coincide with our investing philosophy. We believe that no one can consistently predict the markets and that the best response to this unpredictability is to be well diversified across various sectors, market caps and regions of the investing landscape. We also believe that staying invested in equities, even in difficult market environments, can create the best possibility for success.

We feel differently about tactical management in the fixed income arena. We have been using a “go-anywhere” style of bond management by using managers who have the ability to invest in various asset classes within the fixed income universe. In the current U.S. market environment of historically low interest rates and the possibility of the Federal Reserve raising rates in the near future, we believe staying nimble in fixed income is a prudent way to be invested right now. This includes the continuing use of our tactical fixed income managers who have the ability to go to cash when certain market conditions arise. We believe this strategy will add value to our clients’ portfolios. We also have created a small sleeve for alternatives to go alongside our fixed income positions.

If you are interested in digging further into our thinking regarding investment philosophy, we would love to discuss these changes with you in more detail. We strive to partner with you as you make investing decisions and welcome open dialogue regarding investing strategy and planning. We are excited to continue to earn your trust and value your relationship with us.