San Diego Investment Firm

INVESTMENT STRATEGY OVERVIEW

We offer five investment strategies to our clients, ranging from Conservative to Aggressive.

Conservative

Moderately Conservative

Moderate

Moderately Aggressive

Aggressive

Conservative

The Conservative strategy attempts to earn stable returns with low levels of volatility over time while maintaining a focus on downside risk management.

Moderately Conservative

The Moderately Conservative strategy attempts to earn stable returns with low levels of volatility over time while accepting a small degree of risk and volatility to seek some degree of appreciation.

Moderate

The Moderate strategy seeks to achieve equity-like returns while exhibiting less volatility and maximum drawdown over full market cycles.

Moderately Aggressive

The Moderately Aggressive strategy seeks to achieve equity-like returns over full market cycles but with less risk.

Aggressive

The Aggressive strategy strives to aggressively take advantage of global capital market investment opportunities while exhibiting less volatility and maximum drawdown than conventional equity portfolios over full market cycles.

Our Two Guiding Principles

1 Risk Contribution

2 Exchange Traded Funds (ETFs)

1

To help keep clients from making the grave mistake of selling during periods of high volatility, we created the Risk Contribution Method. This methodology helps remove the natural human instinct of buying high and selling low (where we should be buying low and holding on for the long-term). It will instead underweight asset classes of high risk and overweight those of low risk.

While the sub-asset class levels (e.g. U.S. large-cap stocks) are largely efficient, the major asset classes are not. It is common for stocks to be at risk when an economic slowdown is imminent, whether that be a growth rate slowdown or an economic expansion. Sometimes, but not always, this coincides with periods of investor euphoria. In short, when stocks have had a good run and they are at their riskiest, we simply take some money “off the table.”

It is also common for stocks to be underpriced during periods of investor panic and economic contraction. After a stock market crash, we are able to take advantage of cheaper equity prices and buy at discount prices.

The Risk Contribution Method identifies these periods by carefully evaluating reliable forward-looking indicators (read more here). We then underweight those risk assets and overweight others to take advantage of these misaligned prices.

2 EXCHANGE TRADED FUNDS (ETFs)

We invest exclusively in ETFs (exchange traded funds). An ETF is a basket of securities, usually stocks or bonds, that trade on an exchange and typically track an underlying index. They are similar to mutual funds, though ETFs offer three major advantages:

  1. ETFs trade throughout the trading day where a mutual only trades once after the market is closed. This allows us to provide more liquidity to our clients
  2. ETFs are more tax-advantaged versus mutual funds. Due to structural differences, ETFs typically incur less capital gains to their shareholders. Additionally, capital gains tax on an ETF is incurred only upon the sale of the ETF by the investor, whereas mutual funds pass on capital gains taxes to investors through the life of the investment.
  3. Most ETFs have extremely low expense costs versus other investment vehicles. While these fees are built into the structure of the fund themselves, they are costs nonetheless. As a fiduciary advisory firm, we do not receive commissions or kickbacks from fund companies. Therefore, our incentive is to keep unnecessary costs from burdening your investment portfolio. ETFs help us do this effectively.

Technology

You will have 24/7 access to your accounts that includes balances, positions, asset allocation, performance, statements, tax forms, RMD amounts, and others. In addition, you will also be able to track your overall net worth in real-time, a critical piece when evaluating your long-term financial goals.

Where Your Money is Held

All of our client’s assets are held at TD Ameritrade via brokerage accounts (IRA, Roth IRA, Trust, Jt Ten, etc.). We do not directly custody our client’s assets. Your account(s) is held at a large, well-known advisory firm where you will have 24/7 access to your account.

Our Fees

Our fee schedule is designed to be fair and transparent. As a fiduciary advisor, we do not receive commissions, kickbacks, or any other form of outside compensation.

As our account minimum is $1MM, our fee schedule begins at 0.89% of assets under management (AUM) and falls as the household balance increases. For a full breakdown of our fee schedule and computations, please click below.