Our investment philosophy is fundamental to how we manage our client portfolios. Developing an investment strategy and building a customized investment portfolio that functions appropriately given your goals and objectives, risk tolerance, financial position and resources, time horizon, income and liquidity needs is vital to your long-term success.
After implementation of the investment plan, we provide ongoing discretionary management of your financial assets while providing you with easy to understand investment reports and portfolio updates along the way. Our fee for wealth management services is based on a percentage of assets under management and all client accounts are held at TD Ameritrade.
Our mutual fund and exchange-traded fund (ETF) portfolios start with a strategic asset allocation approach spanning a wide variety of asset classes. Within our allocations we attempt to uncover asset classes and investments that offer low correlations and high portfolio diversification benefits. This helps mitigate portfolio volatility, which combined with our overall philosophy, makes for a much smoother investment experience.
Once a strategic allocation is determined, we will manage portions of the portfolio based on our ongoing research of both the financial and economic environment. These tactical moves can be offensive minded, based on value we may have uncovered that creates an opportunity, or defensive minded to protect against unfavorable market or sector valuations and economic trends. This is accomplished by blending both mutual fund and ETFs chosen through a rigorous screening and research process.
NewFocus Financial Group also offers an individual stock portfolio using a dividend growth strategy. The best way to return cash and create long-term value to shareholders is in the form of dividends, versus the use of share buybacks and mergers/acquisitions. Dividends paid out to shareholders are historically a more stable and predictable mechanism for returning excess earnings and free cash flow.
Fundamental analysis is the primary tool in the selection of securities to use in our portfolio. For individual companies, this includes a review of the underlying financial characteristics of the business, a study of the firm’s competitive environment, as well as other qualitative and quantitative factors.
Several components of our investment evaluation process are listed below:
We typically sell a security under the following conditions:
In combination with the factors above, another investment provides us with a better opportunity.