Advisory Services
Investment Management
What is it?
Investment management is seeking our advice as to how to invest, where to invest, when to invest, and in what to invest your money. You then open an account with our custodian. Custodians are the ones that actually hold your money. AT NO TIME will we take possession of your money! We will however instruct the custodian to do the things first mentioned, i.e., how, where, when, and in what. Technically called discretion, this process is easy and transparent. You will always be in the know about what is happening with your money!
How We Do It!
We use what is called a, “passive”, management strategy. When a security is sold, two things usually occur; 1.) a commission is paid to a broker who helped arrange the sale, and 2.) in the instance that it was sold for more than it was bought; taxes, called capital gains taxes become due on the difference. The amount of capital gains taxes depends upon how long the security was owned before it was sold. A general rule of thumb is one year. Anything under one year is considered a short term capital gain, and is taxed at an ordinary income tax rate; typically these are the highest tax rates! However, a security owned for over a year is considered a long term capital gain, and is taxed at a lower rate. By holding on to securities long term, a passive management strategy aims to keep more of your money in your pocket!
Risks Involved With Investing
First and foremost, there is the risk that you can lose money. We know nobody likes this risk, but the hard truth is that nothing is free from risk! How the risk shows up can differ. Because we value transparency we’ve included some of the risks that go along with investing.
Market Risk
Just like the concept of a food market, securities markets are where people gather together to buy and sell securities. Market risk is the risk that what you bought declines in value due to economic factors that impact the market as a whole. Unfortunately, there is no way of avoiding this risk if you are invested in any way.
Inflation Risk
Think of going to a store and one day your favorite item no longer costs $1.00, but $1.05, and all you have is $1.00. You can no longer buy your favorite item. Simply put, inflation diminishes your buying power. Like market risk, there is no way of avoiding this type of risk. However, what you invest in can help lessen the impact of the risk of inflation.
Credit Risk aka Default Risk
Just like when you borrow money, you promise to pay the loan back with extra money, called interest. There’s also a possibility that you may pay late, miss payments, or not pay back the loan altogether. Corporations and governments face the same possibilities when they borrow money in the form of bonds. Investing in a bond (loaning money) carries credit/default risk, meaning you may not get the money back that you loaned, and there may be late or missed payments by the borrower. Ultimately the level of risk depends upon factors such as how much debt the borrower is in opposed to how much income they are able to bring in.
Financial Planning
We believe that a well designed financial plan is paramount to your financial success. Listed in the following sections are the elements of our financial plan.
Budgeting
We review your existing budget and make spending suggestions through evidence-based analyses of merit and authenticity; i.e., we review your bank records and receipts. We then monitor your expenditures against your set budget while preparing accurate reports that estimate your future financial needs.
Risk Management
We review and assess your current risk management policies and protocols. We then make recommendations for implementations, modifications and improvements.
Investments
We handle the activities associated with the management of your portfolio, from construction, to the buying and selling of securities, to portfolio monitoring, transaction settlement and performance measurement. We report these things to you in a manner that is clear and easy to understand.
Tax Efficiency Planning
We know that the tax code can be complex and have an impact on your savings and investment decisions. This is why we partner with your tax professional, or we can refer one to you to help you to be in the most optimal tax situation
Financial Literacy Workshops
In today’s world of influencers and gurus, you should want to get your money education from a trained and licensed professional. Our financial literacy workshop offers an overview of the basics of personal finance. We give you the absolute truth on topics ranging from credit, to saving and investing. There’s even a section on professionals in the industry, and the role each one has. Think of this service as “Knowing BEFORE you go!”