We offer separately managed accounts at Interactive Brokers that are open to all US and foreign individual investors tailored to each client’s situation and investment goals. Please contact us to discuss further if your assets are held at a different broker. Portfolios are adjusted based on your personal needs as well as achieving our investment goals.
Each client receives a dedicated Investment Counselor who knows you by name and is your primary point of contact. Clients also have access to a wide array of exclusive client programs, research and educational materials.
For our separately managed accounts at Interactive Brokers the minimum is $100k.
The stock market (we define as the S&P 500 index, or a proxy for periods prior to 1957 when it officially represented 500 companies - see "Research: Methodology") has averaged more than 10% growth per year since WW2, resulting in 17X the original investment. In fact the worst 30 year return, regardless of starting month, was about 8.8%, that still results in about 12.5X.
Modern Portfolio Theory is an academic theory employed to optimize expected return for a given level of volatility. Other than emotional comfort, low volatility provides no economic benefit to the investor. Take, for example, a 30 year US treasury bond yielding 3%. If held to maturity, the return will be about 3%, possibly slightly more or less depending on future rates and reinvestment impact. On the other hand, as previously cited, the worst 30 year return for the broad stock market index (see "Research: Methodology") is 8.8% annually. Simply put, Modern Portfolio Theory replaces high growth stocks with low growth bond for the purpose of reducing volatility. However, the cost of lower volatility is the increased probability of dramatically lower future portfolio value.
No. We use 3 types of strategies to perform 3 types of functions: Growth, Preservation, and Liquidity. In order to meet the constraint of sufficient funds when needed, our process steadily transitions funds from Growth to Preservation to Liquidity. This is a proprietary process based on market cycle, portfolio growth, and timing of cash flow needs.
Market corrections over any 30 year period have averaged about 35% and have been as high as 50% (see "Research: Corrections"). Attempting to reduce or eliminate exposure to corrections requires an extraordinarily high cost, similar to insurance. The average annual stock market return of 10% reflects these setbacks. We believe it is far more prudent to accept interim setbacks as a cost for long term consistent returns than to risk the uncertainty of new strategies that try to avoid them.
Our fees vary from 0.15% to 0.75%, depending on strategy. This covers advisory and management services. Most financial advisors charge an advisory fee of typically 1-2% for the service of selecting other managers. For these advisors, depending on whether the investment is in the form of a mutual fund or separately managed account, there is an additional 0.75-1.50% that may or may not be explicitly stated. Note that when we use ETFs, there is an embedded administrative fee by the ETF manager that is typically 0.05% to 0.40%. This is likely to average about 0.20%. This embedded ETF fee is in addition to our advisory and management fees.
Our portfolio management process specifically optimizes trade decisions based on tax implications. We judge ourselves based on after tax returns.
Our primary custodian is Interactive Brokers due to their costs (lowest in industry) and execution (best in industry, in our opinion).
We understand how important it is to track progress toward reaching your financial goals. Standard custodian statements can seem very confusing since they are trying to address a wide range of interests. ThinQ produces a separate quarterly report to focus on aggregate performance relative to our target. This will present your standard statements in terms that make sense.
Client communication is one of the most important aspects of our relationship. We want you to fully understand our strategy, process and procedures. Successful investing is a marathon not a sprint. The question of a potential storm is not if but when. Your preparation is absolutely critical to allow us to stick with the plan to achieve your goals. Reversing strategies based on emotion is the single biggest mistake an investor can make and the only way to avoid it is by being informed and making rational decisions in-line with the goals.