"Perhaps the greatest value we can provide to our clients is to help them see, organize and manage their total financial picture, as it stands today, and projected forward through time and across generations." Karl Mills
Our client is at the center of everything we do and we work to forge a strong relationship based on trust, understanding, candor and accountability.
We combine a thorough understanding of client needs and aspirations with a forward-looking view of the world, and set investment goals and objectives based on realistic assumptions and time frames.
We work closely with our clients to consider their total financial picture in developing a long-term financial plan and strategy. We carefully consider all of a client's assets, liabilities, risk exposures, sources of income, spending requirements, as well as the many legal, tax, philanthropic, social and personal issues that are frequently involved.
We think for ourselves and design and manage client portfolios to weather a wide range of market environments. In doing so, we incorporate the following guiding principles:
- Capital Preservation: In evaluating risks and opportunities, we emphasize capital preservation and seek to minimize outsized losses.
- Balance: Incorporate an appropriate balance between appreciation-oriented, defensive and alternative assets and strategies, and between near-term tactical, and longer-term strategic thinking, and between liquid and illiquid investments.
- Diversification and Focus: Allocate assets to a range of asset classes. Within an asset class, invest with focus, emphasizing strategies and sectors that are most favorably positioned relative to our outlook.
- Long-term focus: Invest with a longer-term perspective, based on what we believe will happen over the next three to five years, rather than next week or month.
- Flexibility: Maintain areas of flexibility within the portfolio that can be used to increase or decrease risk-exposure as market conditions and our outlook changes.
We seek to identify areas of risk and opportunity relative to client needs for income, capital preservation and capital appreciation, as well as tolerance for risk.
Client portfolios are constructed of three basic structural elements and allocated across a range of asset classes and investments to provide suitable diversification.
These three elements are:
- “Targeted Growth” and Opportunistic investments focused on areas of higher growth, opportunity and risk;
- A “Defensive Core” of global equity and alternative investments designed to stabilize, and provide balance and flexibility to client portfolios.
- A “Foundational Base” of bonds and cash to anchor portfolio and provide liquidity.
The allocation to each component will vary by client objectives and risk tolerance.
In all cases, we seek the best investments to reflect our strategy and typically use a combination of actively managed no-load mutual funds, Exchange Traded Funds (ETFs), and other investment vehicles.
Long Time Horizon
We invest with a long-term perspective for three important reasons:
- First, because the relevant time horizon for most investors is measured in years and decades rather than weeks and months;
- Second, because the thing in which we are invested - the growth of economies and companies - takes years and doesn’t change in any meaningful way from day to day or minute to minute, and
- Third, because it tends to produce superior results.
While we believe that portfolio management should be a dynamic process, in response to and/or anticipation of changing conditions, we also believe that a well designed and engineered portfolio should be able to anticipate and withstand a wide range of market environments without requiring much change or adjustment.
In our experience, less is more: frequent and reactionary short-term changes to portfolio positioning tend to result in diminished long-term performance.
And so we invest as if we have to lock a portfolio away for three to five years without the ability to make any changes. Although the majority of our positions have daily liquidity, this approach helps us to cut through the near-term noise and focus on areas of long-term conviction.
Although we tend to use active managers over passive strategies, we only do so if we believe an active manager can significantly outperform a passive alternative net of all fees and expenses.
In selecting outside managers, we look for the following:
- A coherent, credible and consistent strategy and approach aligned with our objectives
- Outstanding long-term performance across a variety of market environments
- A strong investment culture and reputation
- Significant management stake in the firm and the investment strategy geared towards performance over size
- A willingness to close the strategy to maintain performance and quality of approach.
- Synergy with other portfolio holdings
- Reasonable fee structures relative to performance
In selecting passive strategies, we look for the following:
- Portfolio methodology and structure relative to our investment objective
- Performance relative to relevant benchmarks and active alternatives
- Institutional resources and credibility
- Reasonable expense ratios
We may also use individual stocks, bonds, notes, investment partnerships, and other securities if consistent with our strategy, attractive in terms of return relative to risk and liquidity, and suitable relative to client objectives.
We will also hold and incorporate legacy assets, considering tax and other issues relative to risk and return potential, other opportunities, and portfolio objectives.
Putting It All Together
The result is a dynamic and durable portfolio, targeted at areas of opportunity but also designed with strong defensive qualities.
We believe that the combination of our strategic investment framework and asset allocation model, along with the selection of superior investment managers and investments represents an important point of differentiation and advantage for our firm and our clients.
Client portfolios vary by client objectives, but tend to reflect the same overall strategy and methodology.
We stay close to our clients and incorporate changes in their personal circumstances and priorities into how we manage their assets.
This approach to investing and dealing with our clients defines our Private Wealth Management Services.