Our process starts with your objectives; whether in a meeting, over the phone, or on Zoom, we discuss your most important financial goals and the current and future resources you will have to commit to those goals.
Once we understand your financial objectives, we will share with you what we know about investing and how to develop an appropriate investment portfolio to achieve your goals. The brochure from Dimensional Fund Advisors, Pursuing a Better Investment Experience, is an excellent resource summarizing the concepts and investment philosophy we use.
After reviewing these principles and how they should impact your wealth, we decide on a long-term asset allocation most appropriate for your goals. We believe the most effective approach to deciding on a portfolio allocation is to review the long-term historical risk and return data on various stock and bond mixes. The Dimensional Core Plus Wealth Model Indexes report is a tremendous resource that lists periodic results for a series of globally diversified, balanced portfolios that reflect the latest and most advanced thinking available on portfolio construction.
Specifically, our investment portfolios emphasize the segments of the market, known as “dimensions,” that have historically earned higher long-term returns than a basic index: small cap, value, and higher profitability companies. The chart below highlights these dimensions across global markets.
Once we create and agree to an Investment Policy Statement, we will implement your allocation across your various accounts under our management. We consider each client's specific tax circumstances when investing; we will tailor the portfolio holdings in taxable accounts to ensure maximum tax efficiency.
We use the mutual funds and exchange-traded funds (ETFs) from Dimensional Fund Advisors (DFA) when implementing portfolios, however we will incorporate pre-existing index mutual funds or ETFs based on the embedded gains and tax situation for each client. We manage portfolios continually and rebalance when the allocation drifts beyond a tolerable range or when accounts experience cash inflows or outflows.
We talk with our clients regularly, reviewing their progress relative to their goals and answering any investment and financial questions they have. Unfortunately, even with a plan, most investors have difficulty "staying the course" when markets become erratic or exuberant. One of our most valuable services is ongoing behavioral coaching to ensure our clients do not make bad investment decisions at the wrong time. For many clients, the value in this discipline more than covers the ongoing cost of our services.