Achieving Your Goals
Carrick Bend Advisors’ investment policy focuses
on achieving a client’s desired financial goals.
The distinguishing characteristics are asset allocation,
diversification, tax and cost efficiency, and prudent
investment standards.
Asset Classes and Diversification
We construct portfolios consisting of multiple asset
classes, using securities that are tax efficient, cost
efficient, and diversified.
The above chart ranks and color-codes asset class returns
over a multiple-year period and represents the importance
of being diversified. Predicting which asset classes
will be the top performers in any given year appears
to be impossible. No discernable patterns present themselves.
Investing is just not that simple. The more prudent
course is to create strategies based upon the realities
of investing. These strategies attempt to mitigate the
risks inherent in the capital markets.
Diversification is more about asset classes than about
the number of stocks or mutual funds in a portfolio.
An asset class is any group of investments that share
characteristics but have unique risk and return characteristics
when compared to other investments.
The above chart shows the returns of three asset classes,
the S&P 500 (Asset A), Domestic Micro Cap Stocks
(Asset B), and the Wilshire Real Estate Investment Trust
Index (Asset C). Also shown is an equal weighted portfolio,
rebalanced annually, of all three asset classes (Asset
ABC). Over the shown time period each asset class performed
differently.
Given the unpredictability of investment returns, we
think Portfolio ABC offers the best risk adjusted returns
of the alternatives shown.
Tax Efficiency
We incorporate several strategies to maintain tax efficiency
in our clients’ portfolios.
Prudent Investor Standard
Carrick Bend Advisors adheres to a prudent investor
standard, and we view managing a client’s portfolio
as a fiduciary responsibility.
Maximizing Returns
Our strategy seeks to maximize after-tax risk adjusted
total return for our clients. Our investment philosophy
is based upon academic research, primarily the research
of noted finance professors Eugene Fama and Kenneth
French. We are strongly committed to conducting and
reviewing finance research, both practical and academic,
and we incorporate our findings in client portfolios.
|
