521 Capitola Avenue
We are financial planners first and portfolio managers in the respect that the portfolio complements your plan. Our first priority is not to track some stock market index, but rather to make sure our clients can achieve their personal financial goals such as buying a house, funding their children's education, or making work optional (retiring). Plus, fund managers historically do not beat the market on a consistent basis. Often, people will ask, "Why did I not perform as well as the market?" To which we remind them that it is not the plan. Let us explain.
A portfolio is simply a tool for the realization of your goals. It is never the means to an end. We are not in the business to make promises that our investments will outperform those of your neighbors. We don’t rule it out, but it has no connection with what we do for our clients. By practicing with good principles of financial planning, our clients should end up with a far better return than most of their neighbors. Understanding that these are two different things and why they are different is the beginning of understanding what we do. Our approach is goal-focused and plan-driven, rather than being based on some attempt to guess the economy or markets. We are convinced that all successful investing involves constantly acting toward the realization of goals, and all unsuccessful investing is based on reacting to whatever the markets happen to be doing at the moment.
Our firm works with upwards of 300+ differing families or institutions and their respective portfolios. Each is geared to our client’s personal goals, time horizons, and risk tolerances. Most of the time, there are multiple types of accounts which each have their own purpose, time frame, and risk profile. Before investing, we have a discussion, develop a plan, and give advice for what portfolio is most suitable.
The first step is to determine what you’re trying to accomplish, how much time you have, and what resources you bring to achieve your goals. It is important for us to achieve a shared understanding of your top financial goals. We look at your current financial condition and consider the time remaining for your objectives: when do you want to make work optional or retire? When do we turn on your passive income stream? When do your children start college? And so forth.
Together we’ll develop an investment strategy. Here and only here do we design a portfolio which, given long-term historical rates of return, gets you where you need to go. After we’ve tailored your portfolio to your long-term goals, we become in a way, your behavioral coach or financial therapist. What does that mean? That we continue to guide you, help you navigate through financial ups and downs, and help you make decisions that don’t compromise your plan. Essentially, we’re here when you need us—even years down the road.
Finally, we look at opportunities to add to your investments before you need to start drawing an income from them, and what other resources you can rely on. These calculations will tell you what rates of return you need to achieve your plan.
By far, the most important factor in determining the long-term investment returns people get in real life is their own behavior. Instead of predicting markets, we focus on managing the way our clients respond to periods of euphoria and panic during market tops and bottoms.
For example, we didn’t make conjectures about when the COVID-19 pandemic would end. Instead, we made sure clients were never overexposed to those declining industries in the first place. Conversely, we do not try to pick a point at which a declining market would bottom. We made sure our clients did not panic out of the bear market early on, and also continued investing at fire sale prices. This was a great example of the power of behavioral coaching to alter the course of people’s life.
We are a fee-based financial planning firm so the way we charge for our advice is twofold. There is a fixed cost for the full financial plan which becomes the basis for the creation and management of the portfolio. The only other cost is an asset management fee based on your assets under our management.
We would invite you to view these expenses as being purely a function of our behavioral coaching. In effect, our advice to continue to make good financial decisions and avoid negative ones is a great deal more than what we charge per year.