Investment Management
Our investment philosophy is simple: You can't control the market, so control your ACTIONs. We use this framework to focus on the aspects of investing that can be controlled and managed.
The ACTION Framework
Our approach is built around the factors you can control. The ACTION framework focuses on the key areas that have the greatest impact on long-term investment success.
(A)sset Allocation
The process of dividing investments among various categories is referred to as asset allocation. Investors may choose to allocate funds solely to one asset class or diversify across cash, bonds, stocks, and alternative investments. The point is that you control how to deploy your assets. Asset allocation is one of the most important parts of an investment plan.
(C)osts
Cost containment is an essential element of successful investing. The lower your costs, the more return you get to keep. We construct and manage your investment portfolio using primarily low-cost investment vehicles, ensuring there are no commissions and, in many cases, no trading fees.
(T)axes
Tax-efficient investing is about finding the right balance between minimizing current taxes and future tax liabilities. Effective approaches include strategic asset location, prudent execution of sales and portfolio rebalancing, and continuous monitoring for potential tax-deductible losses.
(I)nflows
Regularly contributing to your investment portfolio provides multiple benefits. Consistent inflows can accelerate progress toward financial objectives, mitigate portfolio risk, aid in maintaining a balanced allocation, and contribute to tax efficiency.
(O)utflows
Similar to inflows, outflows offer strategic opportunities for portfolio rebalancing and management. An effective distribution plan:
- Ensures a stable and predictable income stream
- Protects cash flow from market fluctuations
- Safeguards the portfolio against unexpected liquidity demands
- Facilitates timely portfolio rebalancing
- Provides tax flexibility
(N)erves
The last, and possibly most difficult step of a successful investment plan is to control your nerves. You can't control the direction of the market, but you can determine how you react to it. Your behavior can dramatically affect your investment results, so communication is key. If you are anxious, let us know.
Our goal is for you to be at peace, knowing that you’ve implemented all the essential ACTIONs. You will have a personalized portfolio that is globally diversified, low-cost, and tax-efficient. We will make smart use of your contributions, and when time, will distribute a steady income stream that is shielded from market volatility.
Markets will still be choppy from time to time, but we find clients are less worried when they understand the thought process behind the design of their portfolio.
The Income Ladder
We build an Income Ladder into all of our clients’ retirement portfolios. The ladder consists of cash, CDs, individual bonds, and target maturity bond funds that mature at different points over a 3–5-year period.
It's not a separate portfolio—it's integrated into the bond portion, so it does not affect the overall allocation.
Smooth & Predictable Income
Withdrawals are not affected by the ups and downs of the market or the unevenness of dividend and interest payments. We'll provide a set amount for each month (which is based on your needs). It’s like a “paycheck” replacement.
Efficiency Equals More Return
We apply “just-in-time” inventory management to your withdrawal needs. Instead of holding cash, we invest in CDs and bonds that mature at staggered times—so funds are available when needed.
Withdrawals Are Insulated From Market Volatility
3–5 years of income needs are invested in safer assets like CDs and investment-grade bonds—so that withdrawals don’t require selling stock investments that may have temporarily dropped, giving your portfolio time to grow.
Portfolio Rebalancing Can Be More Opportunistic
We have several years to replenish the Income Ladder, we can rebalance more opportunistically—waiting during downturns and taking gains during strong markets to extend the duration of the Income Ladder by a few years over time.
Improved Tax-Efficiency
Since the Income Ladder holds bond investments all the way to maturity, there are typically fewer taxable capital gains than if you sold appreciated stock to fund withdrawals, helping keep your strategy more tax-efficient over time.
How The Ladder Works
Investment Portfolio
This is a simple example of a 4-Year Income Ladder for a person that is withdrawing $8,000/month.
$25,000 is initially set aside in a money market to payout the $8,000 for 3 months. Cash is then invested to mature at certain times (3-months, 6-months, etc.) in order to continously replenish the money market.
Periodically, as the investment portfolio is rebalanced, money is added to the back-end of the Income Ladder via new bond purchases. This process continously extends the length of the Income Ladder.
Most clients have an Income Ladder between 3-5 years in order to ride out any prolonged bear markets.
Markets will fluctuate, but your monthly income from the portfolio will be smooth and predictable.
Investment Strategies
There are several strategies that can be integrated into your overall investment plan:
Personal Preferences
We provide a range of options to tailor your portfolio, allowing you to pursue a more defensive or aggressive stance, enhance income potential, or integrate your personal values—all without altering the fundamental structure of your portfolio.
Roth Conversions
Converting tax-deferred assets to tax-free Roth IRAs can be an effective strategy for minimizing future tax liabilities.
Oil / Gas Drilling
These programs provide substantial tax deductions for high income accredited investors looking to shelter current year taxable income. They also provide a stream of income for a number of years.
Annuities
We generally have reservations about most annuities due to their complexity and associated costs, however, there are a few options that can be beneficial.
- Fixed-Rate, Fixed-Term Annuities – These function in a manner comparable to CDs, but typically pay a higher interest rate. This is because they are backed by an insurance company rather than being FDIC-insured.
- Immediate or Deferred Annuities – These annuities provide a lifetime income stream beginning either immediately or at a designated future date, in return for a lump-sum premium payment.
Charitable Giving
Charitable giving can enhance financial planning by reducing taxes, enabling efficient donations of appreciated assets, and aligning wealth with values. Tools like charitable trusts and donor-advised funds can help support philanthropy and long-term goals.
- Charitable Remainder Trust (CRT) - A highly appreciated asset can be transferred to a charitable remainder trust, where the trust can sell the asset without incurring immediate capital gains tax. The donor may receive a charitable income tax deduction and receive a lifetime stream of income. Remaining assets go to a charity.
- Donor-Advised Fund - a charitable giving account where you make an irrevocable contribution, receive an immediate tax deduction, and the assets can grow tax-free. You then recommend grants to qualified charities over time, giving you flexibility on when and where to give without managing a foundation.
Ready To Take The First Step?
No pressure or commitments–just a quick call to see if we’re a good fit for your situation.
